RIV Capital Reports Financial Results for the Third Quarter Ended September 30, 2024
RIV Capital reported record quarterly revenue of $4.9 million for Q3 2024, a 186% year-over-year increase. The company operates three co-located adult-use and medical retail dispensaries, plus one medical-only location. Despite revenue growth, the company recorded a net loss of $63.4 million, primarily due to a $67.4 million non-cash pre-tax impairment charge on intangible assets. The company ended the quarter with $50.7 million in cash and expects to close its Business Combination with Cansortium in the coming weeks. Wholesale revenue reached $1.6 million from sales of cannabis products in New York, with a growing pipeline of approximately 60 retailers.
RIV Capital ha riportato un fatturato trimestrale record di $4,9 milioni per il Q3 2024, con un incremento del 186% rispetto all'anno precedente. L'azienda gestisce tre dispensari per uso adulto e medicale situati nello stesso luogo, più una location solo medicale. Nonostante la crescita dei ricavi, l'azienda ha registrato una perdita netta di $63,4 milioni, principalmente a causa di una svalutazione di beni immateriali non monetari pre-impotuale di $67,4 milioni. Alla fine del trimestre, l'azienda aveva $50,7 milioni in contante e prevede di concludere la sua Combinazione Aziendale con Cansortium nelle prossime settimane. I ricavi all'ingrosso hanno raggiunto $1,6 milioni dalle vendite di prodotti cannabis a New York, con un portafoglio in crescita di circa 60 rivenditori.
RIV Capital reportó un ingreso trimestral récord de $4.9 millones para el Q3 2024, un aumento del 186% en comparación con el año anterior. La empresa opera tres dispensarios de venta al por menor para uso adulto y medicinal que están ubicados en el mismo lugar, además de una ubicación solo para uso medicinal. A pesar del crecimiento de los ingresos, la empresa registró una pérdida neta de $63.4 millones, principalmente debido a un cargo por deterioro no monetario antes de impuestos de $67.4 millones sobre activos intangibles. Al final del trimestre, la empresa tenía $50.7 millones en efectivo y espera cerrar su Combinación Empresarial con Cansortium en las próximas semanas. Los ingresos mayoristas alcanzaron $1.6 millones por ventas de productos de cannabis en Nueva York, con una cartera en crecimiento de aproximadamente 60 minoristas.
RIV Capital는 2024년 3분기에 기록적인 분기 수익 $4.9백만을 보고했으며, 이는 작년 대비 186% 증가한 수치입니다. 이 회사는 성인 사용과 의약품을 위한 세 개의 동시 위치 소매점을 운영하며, 하나의 의약 전용 매장도 있습니다. 수익 증가에도 불구하고, 회사는 주로 $67.4백만의 비현금 세전 자산 손상 부담으로 인해 $63.4백만의 순 손실을 기록했습니다. 회사는 분기를 마치며 $50.7백만의 현금을 보유하고 있으며, 곧 Cansortium과의 사업 결합을 마무리할 것으로 예상하고 있습니다. 도매 수익은 뉴욕에서의 대마초 제품 판매로 $1.6백만에 도달했으며, 약 60개의 소매업체가 증가하고 있습니다.
RIV Capital a annoncé un chiffre d'affaires trimestriel record de 4,9 millions de dollars pour le troisième trimestre de 2024, soit une augmentation de 186 % par rapport à l'année précédente. L'entreprise exploite trois dispensaires de vente au détail pour un usage adulte et médical co-localisés, ainsi qu'un point de vente uniquement médical. Malgré la croissance des revenus, l'entreprise a enregistré une perte nette de 63,4 millions de dollars, principalement en raison d'une charge de dépréciation non monétaire avant impôts de 67,4 millions de dollars sur des actifs incorporels. À la fin du trimestre, l'entreprise avait 50,7 millions de dollars en liquidités et s'attend à finaliser sa combinaison d'entreprise avec Cansortium dans les semaines à venir. Le chiffre d'affaires de gros s'est élevé à 1,6 million de dollars grâce aux ventes de produits à base de cannabis à New York, avec un portefeuille en croissance d'environ 60 détaillants.
RIV Capital berichtete von einem Rekordquartalsumsatz von $4,9 Millionen für das Q3 2024, was einem Anstieg von 186 % im Vergleich zum Vorjahr entspricht. Das Unternehmen betreibt drei zusammengelegte Einzelhandelsgeschäfte für Erwachsene und medizinischen Gebrauch sowie einen medizinischen Standort. Trotz des Umsatzwachstums verzeichnete das Unternehmen einen Nettoverlust von $63,4 Millionen, hauptsächlich aufgrund einer nicht liquiden, vorsteuerlichen Wertminderungsabschreibung auf immaterielle Vermögenswerte in Höhe von $67,4 Millionen. Am Ende des Quartals hatte das Unternehmen $50,7 Millionen in bar und erwartet, in den kommenden Wochen seine Unternehmenszusammenschluss mit Cansortium abzuschließen. Der Großhandelsumsatz erreichte $1,6 Millionen aus dem Verkauf von Cannabisprodukten in New York, mit einem wachsenden Pool von etwa 60 Einzelhändlern.
- Record quarterly revenue of $4.9 million, up 186% year-over-year
- Wholesale revenue grew to $1.6 million from $0.3 million year-over-year
- Strong cash position of $50.7 million to support growth initiatives
- SG&A expenses decreased to $4.6 million from $4.8 million year-over-year
- Adjusted EBITDA loss improved to $3.2 million from $5.0 million year-over-year
- Net loss of $63.4 million, primarily due to $67.4 million impairment charge
- Negative gross profit of $1.2 million compared to $0.1 million profit in prior year
- Cost of goods sold increased to $5.7 million from $1.9 million year-over-year
- Unrealized loss of $0.5 million on changes in fair value of biological assets
Company reports record quarterly revenue of
Adjusted EBITDA1 loss improves; net loss primarily driven by non-cash pre-tax impairment charge on intangible assets
Ended the quarter with
Cansortium Business Combination anticipated to close in the coming weeks
Management Commentary
"Since the launch of adult-use sales in
Mr. Vautrin added, "As we continue to improve our retail network, we're also scaling our wholesale operations, with a growing pipeline of approximately 60 retailers. With the recent strategic distribution agreement with Nabis, we're well-positioned to support this rapid growth across the state. This momentum has continued into the fourth quarter."
Mr. Vautrin concluded, "Since announcing the proposed Business Combination with Cansortium, we've identified and captured substantial synergies, and our joint integration efforts are progressing smoothly. With Cansortium, we're poised to complete this transaction on a solid foundation and positioned to quickly capitalize on the combined expertise and experience of our teams in some of the most dynamic markets in the cannabis industry."
1 | Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. A reconciliation of net loss to Adjusted EBITDA is provided in the table "Supplemental Information – Non-IFRS Financial Measures" below. |
Regulatory Update
Business Combination Update
The Company anticipates being in a position to complete the previously announced business combination (the "Business Combination") with Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) ("Cansortium"), a vertically integrated, multi-state cannabis company operating under the FLUENT™ brand, in the coming weeks. Closing remains subject to, among other things, the requirement for RIV Capital to maintain a certain minimum cash balance as of a specified date prior to closing, and the satisfaction of certain other closing conditions customary in transactions of this nature, all of which are expected to be completed during this quarter. Further details regarding the Business Combination, including the principal closing conditions and the anticipated benefits for RIV Shareholders, can be found in RIV Capital's management information circular dated July 12, 2024 in respect of the RIV Meeting (the "Circular") and in the joint press release issued by RIV Capital and Cansortium on May 30, 2024, both of which can be found under RIV Capital's SEDAR+ profile at www.sedarplus.ca.
Financial Results for the Third Quarter Ended September 30, 2024
The following is a summary of the Company's unaudited financial results for the three and nine months ended September 30, 2024, and 2023. As previously announced, the Company has changed its fiscal year end from March 31 to December 31. Accordingly, the comparative period presented for the nine months ended September 30, 2023, had not previously been reported in historical unaudited condensed interim consolidated financial statements published by the Company. Further details regarding the change in fiscal year end, including the length and ending dates of the Company's financial reporting periods, are available in the Company's Notice of Change in Year End prepared in accordance with Section 4.8 of National Instrument 48-102 and filed on the Company's SEDAR+ profile at www.sedarplus.ca.
Unless otherwise indicated, all financial highlights summarized in tables in this press release are presented in thousands of dollars, except share and per share amounts. All references to "$" are to
Summary Operating Results | ||||
Three months ended Sep. 30, 2024 (unaudited) | Three months ended Sep. 30, 2023 (unaudited) | Nine months Sep. 30, 2024 (unaudited) | Nine months Sep. 30, 2023 (unaudited) | |
Revenue, net | ||||
Cost of goods sold | 5,737 | 1,851 | 12,571 | 5,038 |
Gross profit excluding fair value items | (878) | (154) | (1,785) | 173 |
Unrealized gain (loss) on changes in fair value of biological assets | (520) | 214 | (598) | 493 |
Realized fair value amounts included in inventory sold | 238 | (9) | 271 | (10) |
Gross profit | (1,160) | 51 | (2,112) | 656 |
Selling, general, and administrative expenses | 4,583 | 4,804 | 16,613 | 15,442 |
Impairment of intangible assets | 67,372 | - | 67,372 | - |
Operating loss | (73,115) | (4,753) | (86,097) | (14,786) |
Other loss | (3,832) | (3,785) | (8,348) | (27,511) |
Loss before taxes | (76,947) | (8,538) | (94,445) | (42,297) |
Income tax recovery | (13,588) | (1,152) | (17,816) | (2,199) |
Net loss | ||||
Other comprehensive income (loss) | (1,332) | 732 | (1,347) | (994) |
Total comprehensive loss | ||||
Net loss per share – basic | ||||
Net loss per share – diluted | ||||
Supplemental Information – Non-IFRS Financial Measures(1) | ||||
Three months ended Sep. 30, 2024 | Three months ended Sep. 30, 2023 | Nine months ended Sep. 30, 2024 | Nine months ended Sep. 30, 2023 | |
Net loss | ||||
Income tax recovery | (13,588) | (1,152) | (17,816) | (2,199) |
Accretion and interest expense, net | 3,608 | 2,610 | 10,030 | 7,595 |
Depreciation and amortization(2) | 1,629 | 692 | 3,585 | 2,103 |
EBITDA | ||||
Impairment of intangible assets | 67,372 | - | 67,372 | - |
Fair value items in inventory and biological assets | 332 | (115) | 431 | (380) |
Non-operating expenses (income) (3) | 94 | 202 | (1,931) | 2,835 |
Other non-recurring expenses (income)(4) | 675 | 181 | 4,143 | 16,558 |
Adjusted EBITDA | ||||
(1) | EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. |
(2) | Depreciation and amortization includes expenses recognized through both cost of goods sold and selling, general, and administrative expenses. |
(3) | Non-operating expenses (income) include foreign exchange, share of loss from associates, impairment of associates, and net change in fair value of financial assets at FVTPL. |
(4) | Other non-recurring expenses (income) include litigation settlement expenses, M&A transaction costs, severance, and gain or loss on disposal of fixed assets. |
Summary Cash Flows and Financial Position Data | ||
Nine months ended Sep. 30, 2024 (unaudited) | Nine months ended Sep. 30, 2023 (unaudited) | |
Net cash flows used in operating activities | ||
Net cash flows used in investing activities | (19,665) | (5,322) |
Net cash flows used in financing activities | (2,033) | (5,717) |
Net decrease in cash | ||
Effect of foreign exchange rate movements on cash held | (195) | 8 |
Cash, beginning of fiscal period | 81,887 | 125,601 |
Cash, end of fiscal period | ||
As at Sep. 30, 2024 (unaudited) | As at Dec. 31, 2023 (unaudited) | |
Current assets | ||
Non-current assets | 62,980 | 120,831 |
Total assets | ||
Current liabilities | ||
Non-current liabilities | 148,920 | 157,353 |
Total liabilities | ||
Total shareholders' equity | ||
- Net revenue was
$4.9 million $1.7 million 28% quarter-over-quarter and186% year-over-year. Retail revenue of$3.4 million White Plains ,Kingston , andManhattan , and its medical retail dispensary inSyracuse , compared to$1.5 million Kingston andManhattan , as these stores did not begin selling adult-use products until mid-September. Wholesale revenue of$1.6 million New York , as well as sales of bulk flower to other license holders in theNew York adult-use market, compared to$0.3 million New York adult-use market. - Cost of goods sold (which excludes unrealized fair value changes included in biological assets and realized fair value changes included in inventory sold) was
$5.7 million $1.9 million - The Company reported an unrealized loss on changes in fair value of biological assets of
$0.5 million $0.2 million $0.2 million - The Company reported a gross profit of
$(1.2) million $0.1 million - Selling, general, and administrative ("SG&A") expenses were
$4.6 million $4.8 million - The Company reported an impairment of intangible assets of
$67.4 million New York market compared to the last impairment testing date. The impairment expense is a non-cash item in the current period and reduces the carrying value of the Company's intangible assets on its unaudited condensed interim consolidated statements of financial position to$10.9 million - Other loss was
$3.8 million $3.8 million - The Company reported a net loss of
$63.4 million $0.46 $7.4 million $0.05 $67.4 million - Other comprehensive loss was
$1.3 million $0.7 million - Total comprehensive loss was
$64.7 million $6.7 million - The Company reported an Adjusted EBITDA (as defined below) loss of
$3.2 million $5.0 million
This press release should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three and nine months ended September 30, 2024 and 2023, which are available under the Company's profile on SEDAR+ at www.sedarplus.com and on the Company's website at www.rivcapital.com/investors.
About RIV Capital
RIV Capital is a firm dedicated to developing a leading multi-state platform with a strong portfolio of cannabis brands focused on key strategic markets in the
Non-IFRS Measures
This press release includes references to "EBITDA" and "Adjusted EBITDA" (each, as defined below), which are non-IFRS (as defined below) financial measures. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards ("IFRS"), provide information that is helpful to understand the results of operations and financial condition of the Company. The objective is to present readers with a view of the Company from management's perspective by interpreting the material trends and activities that affect the operating results, liquidity, and financial position of the Company. These non-IFRS measures are not recognized under IFRS and, accordingly, readers are cautioned that these measures should not be construed as alternatives to net income (loss) determined in accordance with IFRS. These non-IFRS measures are not necessarily comparable to similarly-titled measures used by other companies.
The Company defines "EBITDA" as net income (loss) under IFRS, adjusted for accretion and net interest expense (income), income tax expense (recovery), and depreciation and amortization. The Company defines "Adjusted EBITDA" as EBITDA, adjusted for impairment on intangible assets, fair value losses (gains) in inventory and biological assets, non-operating expenses (income), and other non-recurring expenses (income), as determined by management. See "Financial Results for the Third Quarter Ended September 30, 2024 – Supplemental Information – Non-IFRS Financial Measures" above. The terms EBITDA and Adjusted EBITDA do not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies.
Forward Looking Statements
This press release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "enables", "intends", "anticipates" or "does not anticipate", "potential", "seeks" or "believes", or variations of such words and phrases, or state that certain actions, events or results "may", "can", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Cansortium, RIV Capital or their respective subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this press release. Examples of such statements include, but are not limited to, statements regarding: RIV Capital's expectations regarding rapid growth as a result of the strategic distribution agreement with Nabis; RIV Capital's beliefs regarding the legal market for cannabis in
Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although RIV Capital believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of RIV Capital or its portfolio companies.
Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information include: the prompt and effective integration of Cansortium's and RIV Capital's businesses and the ability to achieve the anticipated synergies contemplated by the Business Combination and ongoing integration activities; the diversion of management time on issues related to the Business Combination transaction; expectations regarding future investment, growth and expansion of Cansortium's and RIV Capital's operations; regulatory and licensing risks; Cansortium's and RIV Capital's reliance on licenses issued by state authorities; future levels of revenues and the impact of increasing levels of competition; changes in laws, regulations and guidelines and Cansortium's and RIV Capital's compliance with such laws, regulations and guidelines; the timing and manner of the legalization of cannabis in
Cansortium and RIV Capital, through several of their respective subsidiaries, are directly involved in the manufacture, possession, use, sale, and distribution of cannabis in the adult-use and medical cannabis marketplace in the
While the approach to enforcement of such laws by the federal government in the
Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Cansortium and RIV Capital have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and statements included in this press release are made as of the date of this press release and Cansortium and RIV Capital do not undertake any obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
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SOURCE RIV Capital Inc.
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