LONDON, Ontario, May 15, 2020 (GLOBE NEWSWIRE) — Indiva Limited (the “Company” or “Indiva”) (TSXV:NDVA) (OTCQX:NDVAF) is pleased to announce its financial and operating results for fourth quarter fiscal 2019 and the year ended December 31, 2019. All figures are reported in Canadian dollars ($), unless otherwise indicated. Indiva’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). For a more comprehensive overview of the corporate and financial highlights presented in this press release, please refer to Indiva’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Year Ended December 31, 2019, and the Company’s Annual Consolidated Financial Statements for the Years Ended December 31, 2019 and 2018, which are filed on SEDAR and available on the Company’s website, www.indiva.com.
“2019 was a transitional year focused on infrastructure development and licensing,” Niel Marotta, Indiva’s President and Chief Executive Officer, said. “While facing significant regulatory delays, the Company focused on maintaining tight financial controls and ensuring we had the right processes, people and production capabilities in place to accelerate revenue growth in 2020 and beyond. In Q4 2019, we secured over $13 million in financing in an exceptionally difficult capital market showing that investors believe in Indiva’s strategy and vision. We began 2020 at full pace, highlighted by receiving our edibles, extracts and topicals sales licence on January 31, 2020, and achieving record sales of $2.0 to $2.2 million in Q1 2020, as publicly announced on April 23, 2020. Receiving this sales licence was transformational for Indiva. We immediately began shipping Bhang® Chocolate, which now leads the edibles category across multiple provinces. We also launched our INDIVA™ THC capsules and pre-rolls in new strains like OG Kush.”
With distribution now in place across eight provinces, we are excited to launch additional SKUs in 2020 including the award-winning Wana Sour Gummies. Looking ahead, we are confident that Indiva will continue to set the standard for producing premium products that consumers love.
Niel Marotta, Indiva’s President and Chief Executive Officer
- Gross revenue increased to $1.12 million in FY 2019 from $58,307 in FY 2018.
- The Company had net revenue totaling $923,862 for the year ended December 31, 2019, and $58,307 for the year ended December 31, 2018. Net revenue also included $36,828 of tolling revenue earned in December 2019 realized through the Company’s initial batches of pre-rolls prepared pursuant to the Company’s processing and supply arrangements.
- Net loss increased from $8.5 million in FY 2018 to $11.4 million in FY 2019. The increase in loss pertains mainly to increased operating activities.
- Total operating expenses increased from $7.8 million in FY 2018 to $9.8 million in FY 2019, primarily due to increased salaries, wages and office expenses in connection with the Company’s increased employee count.
- The Company made capital investments of $12.3 million to add production capacity, including the purchase of the Company’s production facility in London, Ontario for $5.7 million.
- The Company realized significant sales growth in Q4 2019 as the Company expanded distribution outside of Ontario. Net revenue in Q4 2019 was $323,454 representing a 74% increase over Q3 2019 net revenue of $185,539.
- Net loss increased from $2.6 million in Q3 2019 to $2.8 million in Q4 2019.
- In Q4 2019, the Company secured additional financing to complete capital projects and for working capital purposes:
- The Company closed the first tranche of a convertible debenture offering in the aggregate amount of $2.1 million net of transaction costs.
- The Company entered into an agreement with an institutional lender for a $7.5 million secured bridge loan, secured by eligible receivables, and a $6.5 million secured demand loan facility. At any given time, the facilities drawn cannot exceed a combined $11.0 million.
- The Company began production of Bhang® Chocolate in Q4 2019. Sales of these products began in Q1 2020 shortly after receipt of the Company’s licence amendment from Health Canada in January 2020.
- In December 2019, the Company realized $36,828 in tolling revenue representing the initial production runs under processing and service arrangements entered into in 2019.
- On October 21, 2019, Indiva announced that it had received approval for its phase three expansion amendment. This expansion added 10,000 square feet of production and processing space. The additional processing rooms are currently operational and are dedicated to edible and pre-roll production.
- On October 22, 2019, Indiva announced that it would manufacture and distribute pre-rolls for Sugarleaf, a Supreme Cannabis Company Inc. brand.
Events Subsequent to Quarter End
- On January 7, 2020, Indiva delivered its first shipment of Sugarleaf pre-rolls.
- On January 14, 2020, Indiva completed its first shipment of cannabis to Quebec.
- On January 20, 2020, Indiva closed the final tranche of its unsecured convertible debenture offering in the amount of $1.0 million, and on February 4, 2020, the Company announced that it had closed an additional $1.5 million in unsecured convertible debentures.
- On January 31, 2020, Indiva received its edibles, extracts and topicals sales licence from Health Canada and began shipping Bhang® Chocolate to Ontario, Saskatchewan, Alberta and Nova Scotia.
- On February 18, 2020, Indiva announced that it had finalized its white-label licensing and manufacturing agreement with Dycar Pharmaceuticals, which provided the Company with an immediate $3.6 million of non-dilutive financing, of which $600,000 had previously been advanced, and an additional $4.5 million of non-dilutive financing that will be provided over two additional instalments.
- On February 27, 2020, Indiva announced that it had launched a branded CannSell education module for Ontario budtenders through Lift & Co further emboldening its commitment to educating Ontario’s retail teams.
- On March 10, 2020, Indiva announced an exclusive license agreement with Wana Brands to produce and distribute their award-winning cannabis-infused Sour Gummies in a variety of flavours and formats.
- On March 31, 2020, Indiva announced that it had received its final licence amendment for its phase four expansion. With that approval, the Company’s London, Ontario-based facility became completely licensed.
- On March 31, 2020, Indiva announced that its Bhang® Milk and Dark Chocolate ranked in the top two positions in the edibles category for Ontario.
To date, Indiva has secured product distribution with eight provinces including Ontario, Quebec, British Columbia, Alberta, Nova Scotia, New Brunswick, Manitoba and Saskatchewan.
Top-selling cannabis products: Bhang® Chocolate continues to lead the edibles category in Ontario and preliminary sales data reports equally impressive results in other provinces where Bhang® is sold. More preliminary performance data is available in Indiva’s April 23, 2020, press release titled, Indiva Reports Preliminary First Quarter Fiscal 2020 Results and Announces Updated Filing Timeline for Q4 Fiscal 2019 Due to COVID-19, which provides additional insight into the products’ performance and the Company’s financial performance in Q1 2020.
Proven, trusted brands: Indiva has rooted its strategy in identifying players from established markets with proven formulations and success. This approach has yielded remarkable results in both performance and in speed-to-market. The Company expects to deliver Wana Brands’ Sour Gummies to Canadians within the year. Wana Brands’ Sour Gummies lead the American edibles market in dollars sold and Indiva anticipates similar demand in Canada. In addition, the Company intends to bring cannabis-infused sugar and salt to Canadians to further expand its award-winning edibles portfolio and make more exceptional cannabis products accessible to all of-age consumers.
Infrastructure that supports future growth: With the receipt of its latest expansion amendment licence, Indiva’s facility is now fully-licensed allowing continued growth in its operational and production capacity, which will be allocated to new product lines and greater output for its Bhang®, INDIVA™ and partner brands.
Passionate, experienced leadership: In 2019, the Company brought in new expertise to ensure that Indiva was positioned for long-term success. Executives with rich CPG experience were brought on board to bring Indiva’s vision and strategy to life. Having a gender-balanced and experienced leadership team provides the Company with a competitive advantage that is delivering results in 2020.
OPERATING AND FINANCIAL RESULTS FOR TWELVE MONTHS ENDED DECEMBER 31, 2019
Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva creates premium pre-rolls, flower, capsules, oils, and edible products and provides production, manufacturing and refinement services to peer entities. In Canada, Indiva produces and distributes the award-winning Bhang® Chocolate, Wana Sour Gummies, Ruby® Cannabis Sugar, Sapphire™ Cannabis Salt and other Powered by INDIVA™ products through license agreements, partnerships and joint ventures. Click here to connect with Indiva on LinkedIn, Instagram, Twitter and Facebook, and here to find more information on the Company and its products.