Christina Lake Cannabis Provides Financial Results for the Third Quarter of its Fiscal 2021 Year
Christina Lake Cannabis Corp. (CSE: CLC, OTCQB: CLCFF) reported a record third quarter in fiscal 2021, achieving gross revenue of $1,290,000, a 495% increase from the previous quarter. General and administrative expenses decreased by 10.4% to $1,666,031. The company also recorded a net income of $3,779,843, compared to $877,763 in Q3 2020. As of August 31, 2021, total assets were valued at $24,808,196. The CEO noted strong demand for cannabis extracts and improved yield from the second crop due to enhanced harvesting techniques.
- Gross revenue increased 495% to $1,290,000 in Q3 2021.
- Net income for Q3 was $3,779,843, a significant improvement from $877,763 in Q3 2020.
- General and Administrative Expenses decreased by 10.4% to $1,666,031.
- Gross profit from sales was only $15,701 after fair value adjustments.
- Net working capital balance was $9,556,801, indicating potential liquidity concerns.
VANCOUVER, British Columbia, Nov. 01, 2021 (GLOBE NEWSWIRE) -- Christina Lake Cannabis Corp. (the “Company” or “CLC” or “Christina Lake Cannabis”) (CSE: CLC) (OTCQB: CLCFF) (FRANKFURT: CLB) is pleased to provide a summary overview of financial and operational results for its fiscal Q3 2021 (three and nine months ended August 31, 2021). During this period, the Company had its highest sales quarter since inception with repeat orders coming from key industry buyers and producers of consumer products including vape and edible manufacturers. For a comprehensive overview of the Company’s disclosed developments in its fiscal Q3 2021 including the Management’s Discussion and Analysis (“MD&A”) dated October 29, 2021, please access the Company’s profile on SEDAR.
All monetary figures in this press release are in Canadian dollars unless specified otherwise.
Primary Highlights for Christina Lake Cannabis in Q3 of Fiscal 2021 (ended Aug. 31, 2021)
- Gross Revenue increased +
495% in Q3 2021 to$1,290,000 compared to$216,738 in Q2 2021; - General and Administrative Expenses decreased
10.4% in Q3 2021 to$1,666,031 compared to$1,858,867 in Q2 2021; - Total of
$24,808,196 in assets and a net working capital balance (current assets less current liabilities) of$9,556,801 ; - Currently engaged in the processing of its stock of dried cannabis biomass into various extracts including distilled and winterized oils, kief, and additional extracted products for sale to other Licensed Producers;
- Sales in the quarter were primarily derived from distillate and kief as production continued to ramp up for both product lines;
- The gross margin percentage for the three-month period was
59% before fair value adjustment. In the comparative period, the Company was not in a revenue-generating position; and - On October 26, 2021, the Company successfully completed harvesting its second crop which has already proven to be a higher yield than the inaugural crop with better quality biomass through enhanced harvesting techniques.
Joel Dumaresq, Chief Executive Officer and Director of Christina Lake Cannabis commented, “This was a productive quarter for the Company as we continued our revenue growth with the support of steady demand for our cannabis extracts. The needs of Licensed Producers have become increasingly sophisticated as product offerings under ‘Cannabis 2.0’ are creating greater demand for both medicinal and recreational use cases. Under CLC’s commercial sales leadership, we’ve been able to align a healthy supply of distillate oils and kief with the needs of a diverse base of Licensed Producer accounts across Canada. Now that our 2021 crop has been completely harvested, our second growing season has proven to have a greater yield than the inaugural crop with a higher quality of biomass that can be attributed to advanced harvesting techniques.”
Christina Lake Cannabis Fiscal Q3 2021 Financial Summary
| Three months ended | Nine months ended | ||||||||||||
| Three and nine months period ended, | Notes | August 31, 2021 $ | August 31, 2020 $ | August 31, 2021 $ | August 31, 2020 $ | ||||||||
| Revenue | |||||||||||||
| Revenue from sale of goods | 1,290,722 | - | 1,569,881 | - | |||||||||
| Cost of sales | (532,428 | ) | - | (623,933 | ) | - | |||||||
| Gross profit before fair value adjustments | 758,294 | - | 945,948 | - | |||||||||
| Changes in fair value of inventory sold | (742,593 | ) | - | (918,074 | ) | - | |||||||
| Gross profit from sale of goods | 15,701 | - | 27,874 | - | |||||||||
| Fair value change on growth of biological asset | 5,430,173 | 3,046,237 | 5,430,173 | 3,046,237 | |||||||||
| General and administrative expenses | |||||||||||||
| Accretion | 8,9,11 | 188,880 | 79,129 | 382,214 | 134,989 | ||||||||
| Consulting fees | 12 | 122,133 | 343,973 | 328,733 | 450,367 | ||||||||
| Communication expense | 1,975 | - | 69,021 | - | |||||||||
| Corporate development | - | - | 365,872 | - | |||||||||
| Depreciation | 4 | 77,080 | 7,166 | 381,028 | 14,331 | ||||||||
| Foreign exchange | (4 | ) | - | (451 | ) | - | |||||||
| Interest expense | 9 | 182,066 | 109,189 | 452,711 | 176,902 | ||||||||
| Insurance | 21,478 | 10,088 | 62,370 | 30,422 | |||||||||
| Management fees | 12 | 36,000 | - | 108,000 | - | ||||||||
| Marketing | 1,574 | - | 403,884 | - | |||||||||
| Nursery expenses | 30,156 | (73,385 | ) | 36,864 | 65,466 | ||||||||
| Office and miscellaneous | 49,589 | 50,227 | 229,784 | 236,653 | |||||||||
| Professional fees | 240,963 | 106,941 | 398,095 | 222,266 | |||||||||
| Property taxes | - | - | 30,566 | 25,144 | |||||||||
| Salaries | 12 | 318,237 | 145,431 | 1,037,998 | 652,711 | ||||||||
| Share based compensation | 12,13 | 372,531 | 1,272,522 | 924,935 | 1,429,777 | ||||||||
| Repairs and maintenance | 17,475 | - | 35,579 | - | |||||||||
| Regulatory fees | 5,898 | 117,193 | 84,155 | 155,205 | |||||||||
| Total general and administrative expenses | (1,666,031 | ) | (2,168,474 | ) | (5,331,358 | ) | (3,594.233 | ) | |||||
| Other items | |||||||||||||
| Accounts payable write down | - | - | (38,528 | ) | 32,817 | ||||||||
| Fair value preferred shares | 13 | - | - | 510,521 | - | ||||||||
| Loss on sale of equipment | - | - | 4,900 | - | |||||||||
| Total other items | - | - | (476,893 | ) | - | ||||||||
| Net and comprehensive income (loss) for the period | $ | 3,779,843 | $ | 877,763 | $ | (350,204 | ) | $ | (515,179 | ) | |||
| Gain (loss) per share – basic and diluted | $ | 0.03 | $ | 0.01 | $ | (0.00 | ) | $ | (0.01 | ) | |||
| Weighted average number of common shares outstanding | 112,607,372 | 81,004,447 | 105,639,215 | 78,071,770 | |||||||||
Notable Business Updates
Attaining Key Benchmark of Tetrahydrocannabinol (“THC”) Concentration
In a press release dated June 29, 2021, the Company announced that its distillate oils had attained an average THC concentration of
Performance of Experimental Cannabis Strains Under Natural Sunlight
In addition to the Company’s seven “proven” cannabis strains comprising the majority of its 2021 crop, more than 90 “experimental” strains have also progressed to the outdoor testing phase and performed exceptionally when grown under natural sunlight. The Company intends to incorporate certain “experimental” strains grown outdoors this year into its strain selection for the 2022 growing season.
About Christina Lake Cannabis Corp.
Christina Lake Cannabis Corp. is a licensed producer of cannabis under the Cannabis Act. It has secured a standard cultivation licence and corresponding processing/sales amendment from Health Canada (March 2020 and August 2020, respectively) as well as a research and development licence (early 2020). CLC’s facility consists of a 32-acre property, which includes over 950,000 square feet of outdoor grow space, offices, propagation and drying rooms, research facilities, and a facility dedicated to processing and extraction. CLC also owns a 99-acre plot of land adjoining its principal 32-acre site, which enables the Company to grow at a much larger scale. CLC cultivates cannabis using strains specifically developed for outdoor cultivation and in its inaugural harvest year produced 32,500 kg (71,650 lb) on its existing facility before developing an adjacent 99-acre expansion property. Such an expansion will ultimately bring CLC’s annual cultivation footprint to over 4.35 million square feet, which could enable at least 150,000 kg (330,693 lb) of low-cost, high-quality, sun-grown cannabis to be produced annually by the Company.
On behalf of Christina Lake Cannabis Corp.:
“Joel Dumaresq”
Joel Dumaresq, CEO and Director
For more information about CLC, please visit: www.christinalakecannabis.com
Jamie Frawley
Investor Relations and Media Inquiries
jamie@clcannabis.com
416-268-9432
THE CANADIAN SECURITIES EXCHANGE (“CSE”) HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE, NOR HAS OR DOES THE CSE’S REGULATION SERVICES PROVIDER.
Forward-Looking Information: This news release includes certain statements that may be deemed “forward-looking statements.” The use of any of the words “anticipate,” “continue,” “estimate,” “expect,” “may,” “will,” “would,” “project,” “should,” “believe” and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this News Release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company’s disclosure documents which can be found under the Company’s profile on http://www.sedar.com.
Statement Regarding Third-Party Investor Relations Firms
Disclosures relating to investor relations firms retained by Christina Lake Cannabis Corp. can be found under the Company's profile on http://sedar.com.
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