Unrivaled Brands Reports First Quarter 2022 Financial Results

Rhea-AI Summary

Unrivaled Brands (OTCQX: UNRV) reported impressive first-quarter 2022 results, revealing a 907.5% increase in total revenue, reaching $20.73 million compared to $2.06 million in Q1 2021. The gross profit surged 3,268.1% to $6.43 million, up from $0.19 million a year prior. While the company aims to enhance its profitability through a 100-day transformation plan and debt restructuring, selling, general, and administrative expenses also rose by 48.4% to $18.77 million.

Positive

• Total revenue increased by 907.5% to $20.73 million.
• Gross profit rose by 3,268.1% to $6.43 million.

Negative

• Selling, general and administrative expenses grew by 48.4% to $18.77 million.
• Amortization and depreciation increased by $2.76 million.

SANTA ANA, Calif., May 16, 2022 (GLOBE NEWSWIRE) -- Unrivaled Brands, Inc. (OTCQX: UNRV) ("Unrivaled" or the "Company"), a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon, today reported its first quarter 2022 financial results for the quarter ended March 31, 2022.

Tiffany Davis, Chief Executive Officer of Unrivaled Brands, stated, “In my recent shareholder letter, I emphasized the importance of a Company’s management and board being able to act swiftly and responsibly to both preserve value and effectively position the organization to capture future growth. 

“I further indicated our immediate focus was to protect our performing assets and to firmly plant us on the path to profitability, beginning with the development and execution of a 100-day transformation plan. 

“I am pleased to report that after an exhaustive review of each of the company’s business units, we have made significant strides in tightening operations and improving financial systems and controls. We have addressed and continue to identify meaningful opportunities to reset the cost structure.   

“We also are taking the necessary steps to restructure our debt, starting with People’s First Choice which will begin to help us preserve operating cashflow. In addition, we are actively pursuing sources of non-dilutive capital. 

“Finally, we realize any transformation takes time and we have a lot of work ahead of us. We expect to announce new members of the management team who have successfully led relevant transformation and turnarounds prior to joining Unrivaled.

 “I continue to be encouraged by our team members who remain hard at work and focused on our day-to-day business. 

“Together, we are making progress and I look forward to sharing more details on our refined strategy and the resulting specific accomplishments, in the coming weeks and months.”

Financial Update

• During the three months ended March 31, 2022, the Company generated total revenue of $20.73 million composed of retail revenue of $12.11 million and cultivation/distribution revenue of $8.62 million. This compared to total revenue of $2.06 for the quarter ended March 31, 2021 which included retail revenue of 1.70 million and cultivation/distribution revenue of $0.36 million. This was an increase of 907.5% in total revenue.
  
  
• The Company’s gross profit for the three months ended March 31, 2022 was $6.43 million, compared to a gross profit of $0.19 million for the three months ended March 31, 2021, an increase of $6.24 million or 3,268.1%.
  
  
• The merger with UMBRLA and the acquisitions of People's First Choice and SilverStreak Solutions in 2021 led to more operations with additional facilities, employees and costs to support them. Selling, general and administrative expenses for the three months ended March 31, 2022 were $18.77 million, compared to $12.65 million for the three months ended March 31, 2021, an increase of $6.12 million or 48.4%. For the three months ended March 31, 2022, amortization and depreciation expenses increased by $2.76 million over the three months ended March 31, 2021, facilities related expenses, such as rent, utilities, repairs and maintenance, security and insurance, increased by $2.38 million over first quarter of 2021. Option expense and director’s compensation increased by $1.81 million with the addition of two more board members or 196 percent. Taxes, licensing and permitting increased by $1.27 million. Advertising increased by $0.90 million. Employee related expenses decreased by $4.86 million or 69.4%.

About Unrivaled Brands

Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon. In California, Unrivaled Brands operates five dispensaries, direct to consumer delivery, a state-wide distribution network, company-owned brands, and two cultivation facilities. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.

For more info, please visit: https://unrivaledbrands.com.

Cautionary Language Concerning Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management's intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as "anticipates," "believes," "plans," "expects," "projects," "future," "intends," "may," "will," "should," "could," "estimates," "predicts," "potential," "continue," "guidance," and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.

New factors emerge from time-to-time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.

Contact
Jason Assad
LR Advisors LLC.
jassad@unrivaledbrands.com
678-570-6791

UNRIVALED BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except shares)
	March 31, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	3,666		$	6,891
Accounts receivable, net		4,026			4,677
Inventory, net		7,724			7,179
Prepaid expenses and other assets		2,195			1,272
Notes receivable		375			750
Current assets of discontinued operations		5,643			4,495
Total current assets		23,629			25,264
Property, equipment and leasehold improvements, net		23,457			23,728
Intangible assets, net		127,294			129,637
Goodwill		48,132			48,132
Other assets		22,235			26,915
Investments		239			163
Assets of discontinued operations		4,817			17,984
TOTAL ASSETS	$	249,802		$	271,824
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Current liabilities:
Accounts payable and accrued expenses	$	36,483		$	31,904
Short-term debt		29,566			45,749
Income taxes payable		8,124			7,969
Current liabilities of discontinued operations		2,210			2,087
Total current liabilities		76,383			87,708
Long-term liabilities:
Long-term debt, net of discounts		7,308			10,006
Deferred tax liabilities		4,435			6,123
Long-term lease liabilities		17,000			21,316
Long-term liabilities of discontinued operations		150			184
Total long-term liabilities		28,893			37,629
Total liabilities		105,276			125,337
STOCKHOLDERS’ EQUITY:
Common stock, par value $0.001:
990,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 530,330,007 shares issued and 528,021,587 shares outstanding as of March 31, 2022; 498,546,295 shares issued and 496,237,883 shares outstanding as of December 31, 2021.		552			521
Additional paid-in capital		399,536			392,930
Treasury stock		(808)			(808)
Accumulated deficit		(258,888)			(250,015)
Total Unrivaled Brands, Inc. Stockholders’ Equity		140,392			142,628
Non-controlling interest		4,134			3,859
Total stockholders’ equity		144,526			146,487
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	249,802		$	271,824

UNRIVALED BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except shares and per share data)
	Three Months Ended March 31,
	2022			2021
Total revenues	$	20,725		$	2,057
Cost of goods sold		14,292			1,866
Gross profit		6,433			191
Selling, general and administrative expenses		18,767			12,650
Gain on sale of assets		(198)			-
Loss from operations		(12,136)			(12,459)
Other income (expense):
Gain (loss) on extinguishment of debt		542			(6,161)
Interest expense, net		(1,766)			(71)
Other income		1,034			345
Gain on investments		-			6,212
Total other income (expense)		(190)			325
Loss from continuing operations, before provision for income taxes		(12,326)			(12,134)
Provision for income taxes for continuing operations		1,688			-
Net income (loss) from continuing operations		(10,638)			(12,134)
Income from discontinued operations, before provision for income taxes		2,135			438
Provision for income taxes for discontinued operations		(95)			-
Net income (loss) from discontinued operations		2,040			438
NET LOSS		(8,598)			(11,696)
Less: Income (loss) attributable to non-controlling interest from continuing operations		-			-
Less: Income (loss) attributable to non-controlling interest from discontinued operations		275			381
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC.	$	(8,873)		$	(12,077)
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted	$	(0.02)		$	(0.05)
Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted	$	(0.02)		$	(0.05)
Weighted-average number of common shares outstanding – basic and diluted		561,818,857			237,752,273

FAQ

What were Unrivaled Brands' earnings for Q1 2022?

Unrivaled Brands reported total revenue of $20.73 million for Q1 2022.

How much did Unrivaled Brands' gross profit increase?

The gross profit increased by 3,268.1% to $6.43 million in Q1 2022.

What major steps is Unrivaled Brands taking for profitability?

The company is focusing on a 100-day transformation plan and restructuring its debt.

What drove the increase in expenses for Unrivaled Brands?

Selling, general and administrative expenses rose by 48.4%, influenced by increased operational costs.