Unrivaled Brands Reports Second Quarter 2022 Financial Results

Rhea-AI Summary

Unrivaled Brands, Inc. (UNRV) reported a significant financial update for Q2 2022, with total revenue surging 511% to $17.56 million, driven by retail sales of $10.95 million and cultivation/distribution revenue of $6.61 million. Gross profit increased by 204% to $8.27 million compared to Q2 2021. However, selling, general, and administrative expenses escalated by 306% to $19.07 million, leading to an operating loss of $67.07 million, up 3,298% year-over-year, largely due to impairment charges of $55.73 million. The merger and acquisitions contributed to operational costs and workforce expansion.

Positive

• Total revenue increased by 511% to $17.56 million year-over-year.
• Gross profit rose by 204% to $8.27 million compared to Q2 2021.

Negative

• Operating loss of $67.07 million, up 3,298% from the previous year.
• SG&A expenses increased by 306% to $19.07 million, significantly impacting profitability.
• Impairment charges of $55.73 million related to acquisitions.

SANTA ANA, Calif., Aug. 19, 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, yesterday reported its second quarter 2022 financial results for the quarter ended June 30, 2022.

Financial Update

• During the three months ended June 30, 2022, the Company generated total revenue of $17.56 million composed of retail revenue of $10.95 million and cultivation/distribution revenue of $6.61 million. This compared to total revenue of $2.87 million for the quarter ended June 30, 2021, which included retail revenue of $2.32 million and cultivation/distribution revenue of $0.55 million. This was an increase of 511.0% in total revenue.
  
• The Company’s gross profit for the three months ended June 30, 2022 was $8.27 million, compared to a gross profit of $2.72 million for the three months ended June 30, 2021, an increase of $5.55 million or 204.0%.
  
• 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 June 30, 2022 were $19.07 million, compared to $4.70 million for the three months ended June 30, 2021, an increase of $14.37 million or 305.9%. For the three months ended June 30, 2022, amortization and depreciation expenses increased by $2.56 million over the three months ended June 30, 2021, facilities related expenses, such as rent, utilities, repairs and maintenance, security, and insurance, increased by $2.89 million over second quarter of 2021. Taxes, licensing and permitting increased by $1.17 million. Advertising increased by $0.73 million. Employee related expenses increased by $3.93 million or 382%.
  
• The Company realized an operating loss of $67.07 million for the three months ended June 30, 2022 compared to an operating loss of $1.97 million for the three months ended June 30, 2021, an increase of $65.09 million or 3,298.5%. This increase was attributed primarily to a $55.73 million charge for impairment of intangible assets and goodwill related to the UMBRLA and People's acquisitions.
  

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 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	June 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	7,263		$	6,891
Accounts receivable, net		855			4,677
Inventory, net		6,038			7,179
Prepaid expenses and other assets		3,084			1,272
Notes receivable		375			750
Current assets held for sale		582			4,495
Total current assets		18,197			25,264
Property, equipment and leasehold improvements, net		21,416			23,728
Intangible assets, net		102,772			129,637
Goodwill		14,506			48,132
Other assets		19,359			26,915
Investments		1,214			163
Long-term assets held for sale		2,791			17,984
TOTAL ASSETS	$	180,255		$	271,824
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Current liabilities:
Accounts payable and accrued expenses	$	37,148		$	31,904
Short-term debt		26,532			45,749
Income taxes payable		9,913			7,969
Current liabilities held for sale		1,851			2,087
Total current liabilities		75,444			87,708
Long-term liabilities:
Long-term debt, net of discounts		7,638			10,006
Deferred tax liabilities		3,986			6,123
Long-term lease liabilities		14,471			21,316
Long-term liabilities held for sale		1,465			184
Total long-term liabilities		27,560			37,629
Total liabilities		103,004			125,337
STOCKHOLDERS’ EQUITY:
Common stock, par value $0.001:
990,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 532,514,803 shares issued and 530,206,383 shares outstanding as of June 30, 2022; 498,546,295 shares issued and 496,237,883 shares outstanding as of December 31, 2021.		554			521
Additional paid-in capital		401,214			392,930
Treasury stock		(808	)		(808	)
Accumulated deficit		(323,710	)		(250,015	)
Total Unrivaled Brands, Inc. Stockholders’ Equity		77,251			142,628
Non-controlling interest		—			3,859
Total stockholders’ equity		77,251			146,487
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	180,255		$	271,824

UNRIVALED BRANDS, INC. and Subsidiaries Consolidated Statement of Operations	Three Months Ended June 30,						Six Months Ended June 30,
		2022			2021			2022			2021
Total revenues	$	17,556		$	2,872		$	38,280		$	4,928
Cost of goods sold		9,286			147			23,578			2,013
Gross profit		8,270			2,725			14,702			2,915
Selling, general and administrative expenses		19,070			4,698			37,837			17,347
Impairment of assets		55,726			—			55,726			—
Loss on sale of assets		542			—			343			—
Loss from operations		(67,068	)		(1,973	)		(79,204	)		(14,432	)
Other income (expense):
Gain (loss) on extinguishment of debt		—			—			542			(6,161	)
Interest expense, net		(443	)		(39	)		(2,210	)		(112	)
Unrealized gain on investments		963			—			963			—
Other income		443			17			1,477			362
Gain (loss) on investments		—			(874	)		—			5,337
Total other income (expense)		963			(896	)		773			(574	)
Loss from continuing operations, before provision for income taxes		(66,105	)		(2,869	)		(78,432	)		(15,006	)
Provision for income tax benefit for continuing operations		449			—			2,136			—
Net loss from continuing operations		(65,655	)		(2,869	)		(76,295	)		(15,006	)
Income (loss) from discontinued operations, before provision for income taxes		1,843			(2,101	)		3,979			(1,663	)
Provision for income tax benefit for discontinued operations		95			—			—			—
Net income (loss) from discontinued operations		1,938			(2,101	)		3,979			(1,663	)
NET LOSS		(63,718	)		(4,970	)		(72,317	)		(16,669	)
Less: Loss attributable to non-controlling interest from continuing operations		—			(868	)		—			(486	)
Less: Income attributable to non-controlling interest from discontinued operations		—			—			275			—
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC.	$	(63,718	)	$	(4,102	)	$	(72,592	)	$	(16,183	)
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted	$	(0.11	)	$	(0.01	)	$	(0.13	)	$	(0.06	)
Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted	$	(0.11	)	$	(0.02	)	$	(0.13	)	$	(0.07	)
Weighted-average number of common shares outstanding – basic and diluted		575,973,609			258,897,777			572,176,041			248,066,926

FAQ

What were Unrivaled Brands' total revenues for Q2 2022?

Unrivaled Brands reported total revenues of $17.56 million for Q2 2022.

How much did gross profit change in Q2 2022 compared to the previous year?

Gross profit increased by 204% to $8.27 million in Q2 2022 from $2.72 million in Q2 2021.

What was the operating loss recorded by Unrivaled Brands in Q2 2022?

The operating loss for Q2 2022 was $67.07 million, an increase of 3,298% year-over-year.

What factors led to the increase in expenses for Unrivaled Brands in Q2 2022?

Increased selling, general, and administrative expenses, including significant rises in employee-related costs and facility-related expenses, contributed to the increase.