TSXV:ACB
VANCOUVER, Nov. 29, 2016 /CNW/ - Aurora Cannabis Inc. (the
"Company" or "Aurora") (TSXV: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) today announced
its financial and operational results for the quarter ended
September 30, 2016.
Operational Highlights and Recent Developments Subsequent to
Q1 2017
- Aurora further strengthened its balance sheet with a current
cash position of approximately $50
million, an increase since September
30, 2016 resulting from approximately $34 million in new equity and debt
financings;
- Announced plans to construct a new 600,000 square foot
state-of-the-art facility (subsequently increased to at least
650,000 square foot), increasing total production capacity to more
than 70,000 kg annually. Management believes the state-of-the-art
nature of the new facility will contribute to significant savings
in production costs on a per gram basis;
- 10,800 active registered patients as at November 28, 2016, reflecting what management
believes is the fastest patient registration rate in the industry
after commencement of commercial operations;
- Achieved new sales milestones:
- Continued sales pace in excess of $1
million per month
- November, 2016 on track to be record month, with product sales
projected in excess of 200 kilograms and gross revenue in excess of
$1.6 million
- Achieved a seven-day sales record between November 18 and 24, 2016, with more than
62 kilograms sold over that period
- Aurora well positioned for the future with approximately
$30 million in additional gross cash
proceeds remain available from remaining warrants, stock options
and compensation options/warrants;
- Converted $15 million of 10%
convertible debentures into common shares.
- Migrated listing from CSE to TSX-V, which the Company
anticipates will increase liquidity and its potential investor
audience;
- Further strengthened board governance with the appointment of
Michael Singer as Chairman of the
board and the appointment of Joseph Del Moral and Barry Fishman as members of the board;
- Appointed Cam Battley as
Executive Vice President;
- Began establishment of onsite analytical laboratory, to
accelerate product time to market and increase sales capacity;
- CanvasRx currently exceeds 13,000 registered patients,
including more than 2,500 patients registered with Aurora as of
today, representing a growth in patient registration in excess of
30% since being acquired by Aurora;
Q1 2017 Operational Highlights
- Revenues of $3.1 million, as
compared to $0 (nil) for the 2015
comparable period, and up 151.7% or $1.2
million from Q4 2016;
- Sold 435,720 grams of cannabis, and up 117.5% from Q4
2016;
- Completed strategic acquisition of CanvasRx, the country's
largest medical cannabis patient outreach and counselling service,
with 19 locations in Ontario and
Alberta;
- Significantly strengthened the balance sheet with $40.8 million in new financings;
- Repaid short-term and long-term loans totaling approximately
$9.5 million in full;
- Converted approximately $2.2
million of 10% convertible notes into common shares;
- Appointed Amy Stephenson as
Interim CFO;
- Industry leading innovation with first mobile app launched for
purchase of legal cannabis:
- To date downloaded by approximately 17,000 individuals,
averaging 60 secure system logins per hour during business hours
from registered Aurora patients;
- Since launch of the app, patient ordering by phone has been
reduced by 33%;
- First LP to commence same-day delivery, now available in two
locations, with approximately 85% of customers in Calgary, and 75% of patients in Edmonton opting for this service, and more
than 10,000 same-day packages shipped to date.
"Our industry-leading pace of patient registration, reflected in
our rapid revenue growth, is a clear validation of the strength of
our brand and our ability to successfully execute on our business
strategy," said Terry Booth, CEO.
"Based on our operational strength and our position as one of the
recognized leaders on the capital markets in the cannabis sector,
we were able to significantly strengthen our balance sheet both
during and subsequent to Q1 2017. Our current cash balance of
$50 million is one of the strongest
in the sector, and positions us exceptionally well to continue
executing on our growth strategy, particularly with the pending
federal legalization of adult consumer use, and our plan to
construct one of the largest envisioned cannabis facilities in the
sector. The Aurora Standard resonates strongly with patients and
the cannabis community, and we will continue to build on our
leadership position through production expansion, ongoing
innovation, exceptional products, and best-in-class customer
care."
Financials
A comprehensive discussion of Aurora's financials and operations
are provided in the Company's Management Discussion & Analysis
and Financial Statements filed with SEDAR and can be found on
www.sedar.com.
Revenues
Sales of 435,720 grams of cannabis for the three month period
ending September 30, 2016, accounted
for revenues of $3.1 million, as
compared to nil ($0) for the same
period in the previous year. Sequentially, compared to Q4
2016, cannabis sales volume (in grams) was up 117.5% and up 151.7%
in terms of dollar revenue, reflecting an increase in the average
price per gram of product sold.
Aurora commenced selling medical cannabis products on
January 5, 2016. Revenues
generated to date reflect what management believes is the fastest
growth rate of active registered patients in the industry as the
company scales up to full production capacity. Of special
note, Aurora uses the metric of active registered patients, which
as at November 27 stood at 10,700,
i.e. not counting patients who have not placed an order for the
previous four months, as opposed to total registered patients.
Gross Margin
As a result of non-cash biological asset accounting during the
quarter, the adjusted gross margin was $0.1
million, as compared to $0
(nil) for the same quarter in the prior year when no sales were
recorded, and an increase from a negative $0.2 million in the prior quarter (Q4
2016). The gross margin for Q1 2017 includes an accounting
charge related to the fair value recognition of biological asset of
$1.3 million. Charges to gross margin
in relation to changes in fair value are a non-cash accounting
treatment under IFRS.
General & Administrative Costs
General and administration costs increased by $0.7 million for the three months ended
September 30, 2016, attributable
primarily to the increase in corporate and general administrative
activities resulting from the acquisition of CanvasRx, additional
costs associated with maintaining the Company's TSX-V listing and
costs associated with negotiating and completing equity and debt
financings totaling $38 million, as
well as signing a $5 million
draw-down equity facility.
Sales & Marketing
Sales and marketing increased by $1.4
million for the period under review as compared to the same
period in the prior year, primarily due to the commencement of
commercial operations and sales of medical cannabis.
Net Loss
The Company recorded a net loss of $5.6
million for the quarter, attributable to a decrease in
unrealized gain on changes in fair value of biological assets,
increased expenditures due to the commencement of commercial
operations, and increased corporate activities related to the
acquisition of CanvasRx and various equity and debt
financings.
Liquidity and Capital Resources
As at September 30, 2016, working
capital was $23.2 million, as
compared to a deficiency of $2.8
million as at June 30, 2016.
The $26.0 million increase in working
capital was primarily attributable to an increase in cash and cash
equivalents of $23.9 million, offset
partially by a decrease in short term loans of $4.4 million.
The increase in cash balance was attributable to the successful
completion of a number of financing initiatives, as follows:
- $23 million in completed brokered
subscription receipt equity financing;
- $15 million in completed private
placement of 10% unsecured convertible debentures; and
Additionally, the Company generated approximately $2.8 million in additional gross cash proceeds
from exercise of warrants, stock and compensation options. The
increase in cash and cash equivalents generated from financings was
offset partially by net cash used for operations of $0.9 million and investments of $4.0 million.
Subsequent to quarter-end, the Company generated approximately
$34 million in new financings as
follows:
- $25 million in completed brokered
private placement of 8% unsecured convertible debentures; and
- Receipts of approximately $9
million from the exercise of warrants, stock options and
compensation options/warrants.
Presently, approximately $30
million in potential additional gross cash proceeds remain
available from the exercise of warrants, stock options and
compensation options/warrants.
Details of the capital initiatives described above can be found
in the Company's filings on www.sedar.com
Outstanding Share Data
As of the date of the MD&A, the Company had the following
securities issued and outstanding:
|
|
Securities
(1)
|
November 28,
2016
|
Shares
|
270,631,918
|
Options
|
9,323,089
|
Warrants
|
42,604,000
|
Compensation
options
|
2,342,000
|
Convertible
debentures
|
12,500,000
|
(1) See
the Company's Interim Financial Statements for a detailed
description of these securities.
|
Outlook
Aurora's business strategy is to continue accelerating its
penetration of the Canadian cannabis market, achieve its Health
Canada sales license for derivative products (cannabis oils) and
launch derivatives sales, transition to profitability in the
short-term, and begin a major facility expansion for additional
production capacity. When the federal government passes legislation
legalizing the consumer use of cannabis, the Company anticipates
participating in the non-medical consumer market, and will envision
further production capacity expansion to meet future market demand
for cannabis products.
About Aurora
Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises
Inc., is a licensed producer of medical cannabis pursuant to Health
Canada's Access to Cannabis for Medical Purposes Regulations
(ACMPR) and operates a 55,200 square foot, expandable,
state-of-the-art production facility in Mountain View County,
Alberta, Canada. Aurora trades on
the TSX Venture Exchange under the symbol "ACB".
On behalf of the Board of Directors, AURORA CANNABIS INC.
Terry Booth, CEO
This news release contains statements about the Company's
expectations regarding production capacity, production yields and
other aspects of its anticipated future operations that are
forward-looking in nature and, as a result, are subject to certain
risks and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, undue reliance should not be placed on them as actual
results may differ materially from the forward-looking statements.
Such forward-looking statements are estimates reflecting the
Company's best judgment based upon current information and involve
a number of risks and uncertainties, and there can be no assurance
that other factors will not affect the accuracy of such
forward-looking statements. Such factors include but are not
limited to the Company's ability to obtain the necessary financing
and the general impact of financial market conditions, the yield
from marijuana growing operations, product demand, changes in
prices of required commodities, competition, government regulations
and other risks set out in the Company's management's discussion
and analysis filed on SEDAR. The forward-looking statements
contained in this news release are made as of the date hereof, and
the Company undertakes no obligation to update publicly or revise
any forward-looking statements or information, except as required
by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Aurora Cannabis Inc.