SMITHS FALLS, ON, Feb. 26, 2015 /CNW/ - Tweed Marijuana Inc.
("Tweed Marijuana" or "the Company"), parent company of licensed
medical marijuana producers Tweed Inc. (Tweed) and Tweed Farms Inc.
(Tweed Farms), is pleased to announce financial results for the
three and twelve-month period ended December
31st, 2014 and to provide operational updates
relating to the period and subsequent events.
With Canada Revenue Agency approval, Tweed has changed its
fiscal year end from December 31 to March
31 to match the year ends of its operating subsidiaries. As
a result, Tweed will have a transitional year of 15 months ended
March 31, 2015, and annual audited
statements for the 15 months ended March 31,
2015 will be filed by July 29,
2015. Further details about the change in year end and the
reporting periods in the transition year and new financial years
going forward will be available in a Notice of Change of Year End
filed by Tweed at www.SEDAR.com.
Revenue for the three months and the twelve months ended
December 31, 2014 was $641,309 and $1,145,662 respectively. The Q4 revenue is
reflective of operations in 6 grow rooms, plus the first harvest
from Tweed Farms. December revenue of $357,142 accounted for
more than 50% of the Q4 revenue and exceeded the total revenue for
the three-month period ended September 30,
2014.
Gross margin was $230,595 or 36.0%
and $414,349 or 36.2% for the three
and twelve month periods ended December 31,
2014 respectively. The gross margin of 36.0% was an
improvement upon the 23.6% gross margin in the quarter ended
September 30, 2014.
Sales, branding and medical outreach and education costs for the
three and twelve month periods ended December 31, 2014 were $728,503 and $1,994,521 respectively. These costs include the
Tweed medical outreach program, branding programs and the client
care center, which interfaces directly with our clients.
These investments are a balance of short-term customer acquisition
initiatives and long-term investments in Tweed's brand and capacity
to engage with patients and the medical community.
Research and development costs were $41,180 and $159,648 for the three and twelve month periods
respectively.
General and Administrative expenses were $1,207,858 for the three months and $3,758,690 for the twelve months
respectively.
Loss from operations for the quarter amounted to $2,654,626 for the quarter and $7,737,103 for the twelve months ended
December 31, 2014.
"It is important to reiterate that Tweed invested in a large
growing platform early so we could remove any customer onboarding
roadblocks," said Bruce Linton,
Chairman and CEO of Tweed. "This investment began to yield
significant inventory in November, clients in December, and
sustained growth to date."
Subsequent Bought Deal Financing
Subsequent to the fourth quarter, on February 24th, 2015 Tweed Marijuana announced
that it had entered into an agreement with a syndicate of
underwriters led by GMP Securities L.P. and including Dundee
Securities Ltd. and M Partners Inc. (collectively, the
"Underwriters"), pursuant to which the Underwriters have agreed to
purchase, on a bought deal basis pursuant to the filing of a short
form prospectus, 9,302,400 common shares (the "Common Shares") of
the Company, at a price of $2.15 per
Common Share (the "Offering Price") for aggregate gross proceeds to
Tweed of $20,000,160 (the
"Offering").
The Company has agreed to grant the Underwriters an
over-allotment option to purchase up to an additional 1,395,360
Common Shares at the Offering Price, exercisable in whole or in
part, at any time on or prior to the date that is 30 days following
the closing of the Offering. If this option is exercised in full,
an additional $3,000,024 will be
raised pursuant to the Offering and the aggregate gross proceeds of
the Offering will be $23,000,184.
The Common Shares will be offered by way of a short form
prospectus to be filed in all of the provinces of Canada except Quebec. The Company intends to use the net
proceeds from the Offering for facilities expansion and general
corporate purposes. The Offering is expected to close on or
about March 17, 2015 and is subject to certain conditions
including, but not limited to, the receipt of all necessary
regulatory and stock exchange approvals, including the approval of
the TSX Venture Exchange and the applicable securities regulatory
authorities.
The securities being offered have not been, nor will they be,
registered under the United States
Securities Act of 1933, as amended, and may not be offered
or sold in the United States
absent registration or an applicable exemption from the
registration requirements of the United
States Securities Act of 1933, as amended, and
applicable state securities laws. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities in any State in which
such offer, solicitation or sale would be unlawful.
Conference Call
Bruce Linton, CEO and Co-Founder
and Don Gibbs, CFO will host a conference call to discuss the
current state of the Company.
Time and Date: 8:30 a.m. EST, Thursday, February 26th, 2015
Toll-Free Dial-In Number: (844) 835-6557
Participant International Dial-In Number: (224) 633-1282
Conference ID: 89058763
About Tweed Marijuana
Tweed Marijuana is Canada's
first publicly traded medical marijuana company and the first
geographically diversified producer with dual licenses under the
Marihuana for Medical Purposes Regulations.
Through its wholly owned subsidiaries, Tweed and Tweed Farms,
the Company operates two state-of-the-art production facilities in
Ontario and distributes marijuana
across the country to Canadian patients managing a host of medical
conditions.
The Company is dedicated to educating healthcare practitioners,
providing consistent access to high quality medication, and
furthering the public's understanding of how marijuana is used for
medical purposes.
Notice regarding Forward Looking Statements
This news release contains forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not
expect", "is expected", "estimates", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Tweed Marijuana
Inc., Tweed Inc. or Tweed Farms Inc. to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Examples of such
statements include: (A) predictions of future demand; (B) plans to
increase capital expenditure and construction related expenses; (C)
anticipated production yields; (D) completion of construction and
availability of new production rooms; (E) forecasted available
product selection; and (F) the ability to meet the closing
conditions and the anticipated closing date of the Offering. Actual
results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained in this news release. Such forward-looking
statements are based on a number of assumptions which may prove to
be incorrect, including, but not limited to: the ability to obtain
any necessary financing; the economy generally; the yield from
Tweed's marijuana growing operations; consumer interest in
products; competition; regulation; anticipated and unanticipated
costs and delays; the ability to receive any required approvals or
consents in connection with the Offering; the ability of Tweed
Marijuana to satisfy the conditions of the Offering or otherwise
close the Offering. Although Tweed Marijuana Inc. has attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Readers should not place undue reliance on
forward-looking statements. The factors identified above are not
intended to represent a complete list of the factors that could
affect Tweed Marijuana Inc. or Tweed Inc. Additional factors are
noted under the heading "Risk Factors" in the Company's
Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the three and twelve months ended
December 31, 2014 available at www.SEDAR.com. The
forward-looking statements included in this news release are made
as of the date of this news release and Tweed Marijuana Inc. does
not undertake an obligation to publicly update such forward-looking
statements to reflect new information, subsequent events or
otherwise unless required by applicable securities legislation.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Tweed Marijuana Inc.