Unrivaled Brands Reports Third Quarter 2022 Financial Results

Rhea-AI Summary

Unrivaled Brands, Inc. (OTCQX: UNRV) reported a Q3 2022 revenue of $10.76 million, a decrease of 46.3% from $20.05 million in Q3 2021. Retail revenue was $8.77 million, while cultivation/distribution revenue was $2.00 million. The gross loss from continuing operations was $(0.06) million, compared to a profit of $0.33 million a year earlier. Operating loss surged to $122.80 million, primarily due to a $107.97 million impairment of intangible assets. SG&A expenses rose to $13.24 million, reflecting increased operational costs post-merger. Strategic restructuring included a $1.53 million loss on asset disposal.

Positive

• None.

Negative

• 46.3% decrease in revenue from Q3 2021.
• $0.06 million gross loss vs. $0.33 million gross profit in Q3 2021.
• Operating loss increased to $122.80 million from $11.70 million in Q3 2021.
• $107.97 million impairment of intangible assets and goodwill.
• SG&A expenses rose by $1.21 million (10.0%) year-over-year.

SANTA ANA, Calif., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Unrivaled Brands, Inc. (OTCQX: UNRV) ("Unrivaled" or the "Company"), a multi-state vertically integrated cannabis company with operations in California and Oregon, today reported its third quarter 2022 financial results for the quarter ended September 30, 2022.

Financial Update

• During the three months ended September 30, 2022, the Company generated revenue from continuing operations of $10.76 million composed of retail revenue of $8.77 million and cultivation/distribution revenue of $2.00 million. This compared to revenue from continuing operations of $20.05 million for the quarter ended September 30, 2021, which included retail revenue of $7.24 million and cultivation/distribution revenue of $12.81 million. This was a decrease of $9.29 million or 46.3% in revenue from continuing operations.
• The Company’s gross loss from continuing operations for the three months ended September 30, 2022 was $(0.06) million compared to a gross profit of $0.33 million for the three months ended September 30, 2021, a decrease of $0.39 million or 119.5%.
• 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 September 30, 2022 were $13.24 million, compared to $12.03 million for the three months ended September 30, 2021, an increase of $1.21 million or 10.0%. For the three months ended September 30, 2022, amortization and depreciation expenses increased by $1.67 million and facilities related expenses, such as rent, utilities, repairs and maintenance, security, and insurance, increased by $2.33 million over third quarter of 2021. Those increases were partially offset by decreases in third quarter 2022 of the following items: taxes, licensing and permitting decreased by $0.51 million and stock compensation expenses decreased by $1.14 million.
• The Company realized an operating loss from continuing operations of $122.80 million for the three months ended September 30, 2022 compared to $11.70 million for the three months ended September 30, 2021, an increase of $111.10 million or 949.5%. This increase was primarily attributable to a $107.97 million impairment of intangible assets and goodwill related to the UMBRLA, People’s, and SilverStreak acquisitions. As part of the Company’s strategic restructuring in fiscal year 2022, the Company terminated its third-party distribution operations in California and its retail and delivery operations at SilverStreak Sacramento, which resulted in a loss on disposal of assets of $1.53 million during the current period.

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 three dispensaries with direct-to-consumer delivery, two cultivation facilities, and several leading company-owned brands. 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 the 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.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except for shares)
	September 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,989		$	6,891
Accounts Receivable		573			4,677
Inventory		2,684			7,179
Prepaid Expenses & Other Assets		1,564			1,272
Notes Receivable		375			750
Assets Held for Sale		23			4,495
Total Current Assets		7,208			25,264
Property, Equipment and Leasehold Improvements, Net		19,576			23,728
Intangible Assets, Net		3,360			129,637
Goodwill		3,585			48,132
Other Assets		16,212			26,915
Investments		721			164
Deferred Tax Asset		608			—
Long-Term Assets Held for Sale		2,579			17,984
TOTAL ASSETS	$	53,849		$	271,824
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
LIABILITIES:
Current Liabilities:
Accounts Payable & Accrued Liabilities	$	37,037		$	31,904
Current Portion of Notes Payable		26,454			45,749
Income Taxes Payable		9,394			7,969
Liabilities Held for Sale		1,653			2,087
Total Current Liabilities		74,538			87,708
Notes Payable, Net of Discounts		7,964			10,006
Deferred Tax Liabilities		—			6,123
Lease Liabilities		12,101			21,316
Long-Term Liabilities Held for Sale		1,357			184
TOTAL LIABILITIES		95,960			125,337
COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ (DEFICIT) EQUITY:
Common Stock, par value $0.001:
990,000,000 shares authorized, 560,353,549 and 498,546,291 shares outstanding as of September 30, 2022 and December 31, 2021, respectively		584			521
Treasury Stock: 2,308,408 shares of common stock as of September 30, 2022 and December 31, 2021		(808	)		(808	)
Additional Paid-In Capital		401,729			392,930
Accumulated Deficit		(443,616	)		(250,015	)
Total Equity Attributable to Stockholders of Unrivaled Brands, Inc.		(42,111	)		142,628
Non-Controlling Interest		—			3,859
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY		(42,111	)		146,487
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	53,849		$	271,824

UNRIVALED BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except for shares and per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Revenue	$	10,762		$	20,052		$	49,042		$	24,980
Cost of Goods Sold		10,826			19,724			34,404			21,737
Gross (Loss) Profit		(64	)		328			14,638			3,243
Operating Expenses:
Selling, General & Administrative		13,236			12,029			51,074			29,376
Impairment Expense		107,972			—			163,698			—
Loss on Disposal of Assets		1,529			—			1,872			—
Total Operating Expenses		122,737			12,029			216,644			29,376
Loss from Operations		(122,801	)		(11,701	)		(202,006	)		(26,133	)
Other Income (Expense):
Interest Expense, Net		(384	)		(515	)		(2,594	)		(627	)
Gain (Loss) on Extinguishment of Debt		—			185			542			(5,976	)
Gain on Investments		—			—			—			5,337
Unrealized (Loss) Gain on Investments		(493	)		—			470			—
Other Income		251			5			1,729			367
Total Other (Expense) Income		(626	)		(325	)		147			(899	)
Loss from Continuing Operations Before Provision for Income Taxes		(123,427	)		(12,026	)		(201,859	)		(27,032	)
Provision for Income Tax Benefit for Continuing Operations		3,449			—			5,585			—
Net Loss from Continuing Operations		(119,978	)		(12,026	)		(196,274	)		(27,032	)
Net Income from Discontinued Operations		72			6,561			4,051			4,898
NET LOSS		(119,906	)		(5,465	)		(192,223	)		(22,134	)
Less: Net (Loss) Income from Discontinued Operations Attributable to Non-Controlling Interest		—			(118	)		275			(604	)
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC.	$	(119,906	)	$	(5,347	)	$	(192,498	)	$	(21,530	)
Net Loss from Continuing Operations per Common Share Attributable to Unrivaled Brands, Inc. - Basic and Diluted	$	(0.21	)	$	(0.03	)	$	(0.33	)	$	(0.09	)
Net Loss per Common Share Attributable to Unrivaled Brands, Inc. - Basic and Diluted	$	(0.21	)	$	(0.01	)	$	(0.33	)	$	(0.07	)
Weighted-Average Shares Outstanding - Basic and Diluted		579,942,517			457,745,655			588,887,945			317,491,979

 

FAQ

What were Unrivaled Brands' Q3 2022 revenue results?

Unrivaled Brands reported Q3 2022 revenue of $10.76 million, down 46.3% from $20.05 million in Q3 2021.

What caused the significant operating loss for UNRV in Q3 2022?

The operating loss surged to $122.80 million due to a $107.97 million impairment of intangible assets and goodwill from recent acquisitions.

How much did Unrivaled Brands spend on SG&A in Q3 2022?

SG&A expenses increased to $13.24 million in Q3 2022, compared to $12.03 million in Q3 2021.

What was the impact of the company’s strategic restructuring in Q3 2022?

The strategic restructuring led to a $1.53 million loss on asset disposal after terminating certain operations.