-
Revenues: $8.4 million, Adjusted EBITDA1 $1.9 million.
-
With an adult program expected to launch in Ohio in the near future, Vext will benefit from its vertically integrated position in the state.
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Announced a $2 million standby credit facility to provide additional liquidity to fund operations.
Vancouver, British Columbia–(Newsfile Corp. – May 29, 2024) – Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) (“VEXT” or the “Company”), a United States-based cannabis operator with vertical operations in Arizona and Ohio, today announced its financial results for the period ended March 31, 2024. All currency references used in this news release are in United States dollars unless otherwise noted.
Financial Results Overview
|
Q1 2024 |
Q4 2023 |
Q1 2023 |
|
|
Revenue |
$8,390,023 |
$8,415,253 |
$9,110,651 |
|
EBITDA1 |
($2,285,845) |
$12,275,213 |
$1,638,009 |
|
Adjusted EBITDA1 |
$1,957,074 |
$550,621 |
$2,930,919 |
|
Adjusted EBITDA margin (%)1 |
23.3% |
6.5% |
31.3% |
Management Commentary
“The first quarter of 2024 continued to present consumer-related challenges for all operators, with quarterly revenue again declining across the Arizona market.” Vext CEO Eric Offenberger said: “At Vext, we have leveraged our expertise as a seasoned operator to drive traffic by offering bundled products at the retail level, and we have outperformed the state average despite the impact to our revenue and gross margins. With the transition to the adult-use framework this year and the expansion of our target consumer base offsetting continued consumer weakness, we believe Ohio is a promising market for the foreseeable future. With relatively low maintenance capital needs, the completion of all significant growth capital expenditures, and significant changes on the horizon for the Ohio market, we expect to begin to significantly increase cash flow while driving returns to shareholders.”
Offenburger added: “Ohio offers significant multi-year growth opportunities for Vext, and the standby credit facility announced today will provide us with additional flexibility to address near-term capital needs as our adult programs gain momentum and our cash flow transitions to growth as we build our significant presence in the state.”
Standby Credit Facility
The Company also announces that it has entered into a financing agreement with certain third-party lenders (collectively, the “Lenders”), including Sopica Special Opportunities Fund Limited (“SSOFL”), pursuant to which the Company will obtain a standby credit facility (the “Standby Credit Facility”) in the principal amount of up to $2 million to provide additional financial flexibility in connection with the Company's working capital investments and pharmacy expansion, primarily in Ohio. Interest on the drawn portion of the Standby Credit Facility accrues at a rate of 12% per annum. Any unused amounts are subject to a monthly standby commitment fee equal to 0.25% of such unused amounts. All obligations under the Standby Credit Facility will be converted into term loans on November 28, 2024, repayable over six months, and maturing on May 28, 2025.
SSOFL is an inside shareholder of the Company, one of its lenders and has committed a portion of the Standby Credit Facility and therefore SSOFL's participation constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101. Protection of minority shareholders in special transactions (“MI 61-101”). The transaction, to the extent it involves SSOFL, is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to Sections 5.5(a) and 5.7(1)(a) of MI 61-101 because neither the fair market value of the Standby Credit Facility nor the consideration paid will exceed 25% of the Company's market capitalization.
Q1 2024 Earnings Conference Call
Vext will host a conference call and webcast on Wednesday, May 29, 2024 at 8:00 a.m. ET to discuss its first quarter 2024 financial results.
date: May 29, 2024 | Time: 8:00 AM ET
Participant Dial-in: +1-647-484-8814 or 1-844-763-8274
Replay Dial-in: +1-604-674-8052 or 1-855-669-9658
Meeting ID: 10023534
View count: 0924 (expires June 12, 2024)
Listen to the webcast: https://www.gowebcasting.com/13356
For more information, please visit Vext's investor relations website or contact our IR team at investors@vextscience.com.
Non-IFRS Financial Measures
This news release contains certain “non-IFRS financial measures” (which correspond to “non-GAAP financial measures” as that term is defined in National Instrument 52-112). Non-GAAP and Other Financial Measures Disclosure (“NI 52-112”), “Non-IFRS Ratios” (which are equivalent to “Non-GAAP Ratios” as defined in NI 52-112), “EBITDA,” “Adjusted EBITDA” and “Adjusted EBITDA Margin.” These financial measures do not have standardized definitions under IFRS, are not calculated or presented in accordance with IFRS and may not be comparable to similar measures presented by other companies. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The Company defines “Adjusted EBITDA” as reported net income (loss) from operations before interest and taxes, adjusted to exclude other non-cash items, including non-recurring items, stock-based compensation expense, depreciation and amortization, foreign exchange and acquisition-related charges, if applicable. The Company defines “Adjusted EBITDA Margin” as Adjusted EBITDA divided by revenues.
The Company provides these financial measures as supplemental information and in addition to financial measures calculated and presented in accordance with IFRS. The Company believes these supplemental financial measures are valuable additional measures to use in analyzing the operating performance of its business. These supplemental financial measures should not be considered superior to, a substitute for or a replacement for the IFRS financial measures presented herein, but only in conjunction with them.
The following information provides a reconciliation of the non-IFRS financial measures presented herein to the most directly comparable financial measures calculated and presented in accordance with IFRS.
|
Q1 2024 |
Q4 2023 |
Q1 2023 |
|
|
Revenue |
$8,390,023 |
$8,415,253 |
$9,110,651 |
|
Net Profit After Tax |
$6,333,412 |
$5,628,139 |
$73,059 |
|
Interest (net) |
800,680 |
826,062 |
860,978 |
|
income tax |
(340,522) |
2,310,796 |
(1,141,064) |
|
Depreciation |
3,587,409 |
3,510,216 |
1,845,036 |
|
EBITDA |
$2,285,845 |
$12,275,213 |
$1,638,009 |
|
Stock-Based Compensation |
13,065 |
111,794 |
130,332 |
|
Accumulation |
– |
(989) |
(6,026) |
|
Joint venture profits/losses |
162,916 |
(65,285) |
91,205 |
|
(Gain)/loss from disposal of assets |
1,444 |
800,154 |
|
|
Refinancing of loans |
– |
– |
|
|
Loan Costs WPCU Loan |
– |
– |
742,036 |
|
Fair Value of WPCU Loans |
460,870 |
1,634,445 |
190,984 |
|
Loan Cost EWB Amortization |
44,286 |
155,068 |
125,451 |
|
APP1803 Optional FV |
2,022,211 |
2,633,784 |
– |
|
RSU Tax |
4,199 |
3,789 |
75,825 |
|
Foreign exchange |
(559) |
1,881 |
2,726 |
|
ERC Tax Credit |
– |
– |
– |
|
Relative fair value adjustment to inventory |
– |
– |
– |
|
Changes in FV of biologics |
604,982 |
1,207,553 |
(59,623) |
|
Increase in fair value from sale of acquired inventory |
929,505 |
– |
– |
|
Gains from control acquisitions and bargain purchases |
– |
(20,550,163) |
– |
|
Provision for notes receivable and joint venture investments |
– |
1,403,377 |
– |
|
Executive Chairman Severance |
– |
940,000 |
– |
|
Adjusted EBITDA |
$1,957,074 |
$550,621 |
$2,930,919 |
|
Adjusted EBITDA margin (%)1 |
23.3% |
6.5% |
31.3% |
About VEXT Science, Inc.
Vext Science, Inc. is a US-based cannabis operator with vertical operations in Arizona and Ohio. Vext's expertise spans from cultivation to retail operations in key markets. Based in Arizona, Vext owns and operates state-of-the-art cultivation facilities, fully equipped manufacturing facilities, and dispensaries in both Arizona and Ohio. The company manufactures Vapen™, one of the leading THC concentrate, edible, and distillate cartridge brands in Arizona. The company's award-winning products are made from Vext's in-house produced, high-quality flower and sold throughout Arizona and Ohio, as well as through Vext's partnerships in other states. Vext's leadership team has a proven track record of building and operating profitable, multi-state operations, and the company has been profitable since 2016. The company's primary focus is to continue to grow in its core states of Arizona and Ohio, bringing together cutting-edge science, manufacturing, and marketing to deliver a reliable, rewarding customer experience while creating shareholder value.
Vext Science, Inc. is publicly traded on the Canadian Securities Exchange under the ticker symbol VEXT and on the OTCQX market under the ticker symbol VEXTF. For more information, visit www.vextscience.com and connect with Vext on Twitter/X and LinkedIn.
For more information on Vapen brands, please see below.
Vapen Website: VapenBrands.com
Instagram: @vapen
Facebook: @vapenbrands
Forward-Looking Statements
Forward-looking statements in this news release are subject to various risks and uncertainties relating to certain factors that are disclosed herein and elsewhere in Vext's periodic filings with Canadian securities regulatory authorities. When used in this news release, words such as “will, may, plan, estimate, expect, intend, may, potential, believe, should” and similar expressions are forward-looking statements.
Forward-looking statements include, but are not limited to, statements regarding Vext's future development and business and operations, market expectations for the cannabis industry in the jurisdictions in which the Company operates, and statements regarding the Standby Credit Facility (including the use of proceeds thereof), all of which are subject to risk factors contained in Vext's ongoing disclosures filed on SEDAR+ at www.sedarplus.ca.
Although Vext has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to, dependence on obtaining regulatory approvals, engaging in activities currently considered unlawful under U.S. federal law, changes in the law, dependence on management, need for additional capital, competition, inconsistent public opinion and perceptions regarding the medical and adult-use marijuana industry hindering market growth and state adoption, and regulatory or political changes.
There can be no assurance that such information will prove accurate or that management's expectations and estimates of future developments, circumstances or results will be realized. As a result of these risks and uncertainties, actual results or events may differ materially from those anticipated in such forward-looking statements.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Vext disclaims any intention or obligation to update or revise such information, except as required by applicable law, and is not responsible for any disclosures made with respect to other companies mentioned herein.
The Canadian Securities Exchange has not reviewed, approved or disapproved the contents of this news release.
Eric Offenberger
chief executive officer
844-211-3725
For more information:
Jonathan Ross, Investor Relations, Vext
Email:
416-244-9851
Source: Vext Science, Inc.
1 For more information regarding Vext's use of non-IFRS financial measures and other reconciliations, see “Non-IFRS Financial Measures” below.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/210870
