SAN JOSE, Calif.–()–In the part with the header “First Quarter 2021 Financial Results”, the final sentence of the fifth paragraph ought to learn: The above consists of $28.Eight million in debt retirement, $15.1 million in transaction consideration, and $8.6 million in banker transaction charges (as an alternative of: …and $8.6 million in transaction charges). Also, in that very same part, the third paragraph is corrected to learn: Operating bills in Q1 2021 had been $61.9 million, which included $40 million of non-cash bills, comprised of $25 million of the advertising bills that had been settled in shares for companies offered below the Roc Nation Agreement. In addition, stock-based compensation of $6.2 million and depreciation & amortization of $7.9 million. The remaining $21.9 million in money working bills had been comprised of basic and administrative prices of $9.5 million, salaries and advantages of $7.Eight million, and gross sales and advertising bills of $4.6 million.

The up to date launch reads:

THE PARENT COMPANY REPORTS FIRST QUARTER 2021 FINANCIAL RESULTS

Achieves Consolidated Net Sales of $40 Million; Adjusted Net Sales of $46 Million

Maintains Industry-Leading Balance Sheet with $281 Million in Cash

Provides Update on Integration and Consolidation Strategy

Conference Call to be Held Today, May 17, 2021 at 5:00 p.m. EDT

TPCO Holding Corp. (“The Parent Company” or the “Company”) (NEO: GRAM.U) (OTCQX: GRAMF), at the moment reported monetary outcomes for the primary quarter ending March 31, 2021 (“Q1 2021”). The Company’s Q1 2021 monetary outcomes replicate the closing of the Company’s qualifying transaction on January 15, 2021. Prior to closing of the qualifying transaction, the Company was a particular goal acquisition firm with no industrial operations. As such, reported gross sales figures for this quarter are anticipated to be decrease than in future quarters because of the abridged working interval. All quantities are expressed in U.S. {dollars}.

First Quarter 2021 Financial Highlights

  • Net gross sales for Q1 2021 had been $39.9 million
  • Adjusting for a full quarter of gross sales starting January 1, 2021, Q1 2021 web gross sales would have been roughly $45.6 million
  • Gross revenue for Q1 2021 was $7.2 million, or 18% of web gross sales
  • Adjusted EBITDA loss for Q1 2021 was $11.Four million. Adjusted EBITDA removes the consequences of modifications in truthful worth of economic devices, impairment prices and different non-cash gadgets.
  • Cash and equivalents totaled $281.Zero million as of March 31, 2021

Management Commentary

“With some of the most well-known cannabis brands, an industry-leading balance sheet, and strong positioning in the California market, we entered 2021 with substantial forward momentum as we continue to execute on our growth and consolidation strategies,” mentioned Steve Allan, Chief Executive Officer of The Parent Company. “Throughout our first quarter of public company operations, our team has worked diligently on the successful integration of our core business units and house of brands to build a strong foundation for sustained growth. This included our recently announced cultivation investments which have bolstered our supply chain with long-term access to high-quality indoor, greenhouse, and outdoor grown cannabis for use in our suite of branded product lines.”

Mr. Allan continued, “In addition, we strengthened our executive team, launched Fun Uncle Cruisers, our first product to take advantage of the full vertical integration of our business, and made our initial social equity investments from our dedicated $10 million fund. I am pleased with the initial results of these efforts, and we will continue to work to optimize our vertically integrated platform as we both prudently evaluate potential acquisition opportunities and organically build our business for long-term success.”

Mr. Allan concluded, “The California cannabis market is ripe for consolidation, and we plan to leverage our competitive positioning to become true leaders in this market. In addition, as we look to further expand our operations into new states, we plan to employ an asset-light model, utilizing our existing asset base to drive scale and profitability. We have a long runway for significant growth, both organically and through acquisitions, and we believe we will create meaningful long-term shareholder value.”

First Quarter 2021 Operational Highlights

Subsequent Events

First Quarter 2021 Financial Results

Net gross sales in Q1 2021 had been $39.9 million. Note the Company’s Q1 2021 monetary outcomes replicate the closing of the Company’s qualifying transaction which occurred on January 15, 2021, previous to which the Company had no industrial operations. Adjusting for a full quarter of gross sales starting January 1, 2021, web gross sales would have been $45.6 million.

Gross revenue in Q1 2021 was $7.2 million, representing gross margin of 18% in Q1 2021. With the Company’s concentrate on driving stronger direct-to-consumer gross sales, The Parent Company expects to shift its gross sales to extra larger margin product classes, which over time, is predicted to drive expanded gross revenue.

Operating bills in Q1 2021 had been $61.9 million, which included $40 million of non-cash bills, comprised of $25 million of the advertising bills that had been settled in shares for companies offered below the Roc Nation Agreement. In addition, stock-based compensation of $6.2 million and depreciation & amortization of $7.9 million. The remaining $21.9 million in money working bills had been comprised of basic and administrative prices of $9.5 million, salaries and advantages of $7.Eight million, and gross sales and advertising bills of $4.6 million.

Adjusted EBITDA loss for the primary quarter 2021 was $11.Four million. The Adjusted EBITDA loss in Q1 2021 was primarily attributable to the continuing operations of the Company’s core enterprise.

Cash and money equivalents totaled $281.Zero million as of March 31, 2021, in comparison with $582.6 million (held in escrow pending closing of the Company’s qualifying transaction) as of December 31, 2020. As of closing of the Company’s qualifying transaction on January 15, 2021, the Company had money and money equivalents of roughly $372.Eight million, comprised of (i) $309.7 million of web IPO proceeds and curiosity obtained by the Company after funds to redeeming holders of sophistication A restricted voting shares within the mixture quantity of $264.Three million, together with related curiosity; and (ii) $63.1 million in gross proceeds from the closing of the Company’s personal placement in Q1 2021 previous to the closing of the qualifying transaction. The above consists of $28.Eight million in debt retirement, $15.1 million in transaction consideration, and $8.6 million in banker transaction charges.

The Company’s Q1 2021 consolidated monetary statements, in addition to its accompanying administration dialogue and evaluation (“MD&A”) have been filed on SEDAR (www.sedar.com). Please check with TPCO’s MD&A for extra element and dialogue on the Company’s outcomes from operations.

Business Integration Update

Following the completion of the Company’s qualifying transaction on January 15, 2021, The Parent Company has applied an integration technique to streamline and optimize the Company’s operations. Centered on driving near-term margin growth whereas positioning the Company for continued long run progress, in Q1 2021 The Parent Company has achieved the next:

  • Portfolio Optimization: Streamlined the Company’s model portfolio providing to eight core manufacturers from 17 beforehand, eliminating redundancies and lowering potential gross sales class overlap.
  • SKU Rationalization: Selectively decreased whole SKU rely throughout the Company’s Eight remaining core manufacturers with a concentrate on larger margin product choices.
  • Product Innovation: Launched Fun Uncle Cruisers, our first product to reap the benefits of the complete vertical integration of our enterprise and one which we consider illustrates how the Company’s important efficiencies and assets can mix to create high quality hashish at an approachable worth level with best-in-class product margins.
  • Expanded Sourcing: Delivered important worth to the tip client by strategically increasing the Company’s sourcing community, securing long-term entry to over 900,000 kilos of high-quality, low-cost, California-grown hashish to supply improved flower product availability and extra enticing pricing.
  • Manufacturing Consolidation: Successfully rationalized The Parent Company’s manufacturing services by closing its 23,000 sq. foot Santa Rosa facility and its Oakland facility, migrating sure manufacturing operations to its San Jose facility. As a results of these modifications, the Company now operates three, streamlined manufacturing services.
  • Distribution: To enhance dispensary supply occasions and to cut back working prices, The Parent Company centralized its distribution operations to 2 wholesale hubs positioned at its San Jose and Costa Mesa areas, ensuing within the closure of its North Hollywood facility.
  • Restructured and Optimized Organization: Integrated and consolidated groups from each Caliva and Left Coast Ventures into The Parent Company’s mixed operations leading to decreased general personnel bills by roughly 10%. Over time, the Company expects so as to add further headcount in sure areas of its enterprise to take a position forward of future grown.
  • Asset Dispositions: In the quarter, the Company accomplished a assessment of its asset base and subsequently acted upon a sequence of structured inclinations which have refocused the Company on its core California hashish operations. This included the sale of the Company’s 34% minority curiosity in Half Moon Grow, as nicely the disposition of the Company’s Acai Puree enterprise line. In addition, the Company has entered right into a definitive settlement to promote its hemp CBD enterprise to Arcadia Biosciences. The transaction is predicted to shut earlier than the tip of the second quarter.

Outlook

The Parent Company has made substantial progress on its integration efforts and based mostly on the continued power of its natural operations, the Company believes it stays nicely positioned for sustained, long-term progress. On an ongoing foundation, the Company opinions its monetary forecasts to evaluate the reasonableness of particular developments and broader trade and financial elements. During this course of, the Company opinions for unanticipated delays in receipt of licensing approvals, construct out of services, integration actions, and company growth alternatives as a result of aggressive actions, in addition to potential delays within the construct out of its distribution facilities and deliberate retail shops.

As a results of the above and because of the uncertainty inherent in forecasting working outcomes given the present standing of the California hashish trade, The Parent Company has elected to withdraw its beforehand offered steering, which included advantages from potential company growth actions in addition to income from the Company’s divested hemp CBD enterprise line.

The Parent Company has a strong pipeline of potential company growth actions and stays dedicated to making sure that potential acquisitions are accretive to the Company’s strategic progress initiatives, create operational efficiencies, and drive long-term shareholder worth. As such, timing round these alternatives stays unsure. To speed up its execution on company growth alternatives, the Company has retained two skilled exterior advisory companies with deep backgrounds in figuring out, evaluating and executing inorganic alternatives.

The Company additionally introduced at the moment that Drew Kornreich is stepping down from his place as Chief M&A Officer to pursue different alternatives efficient May 17, 2021. “On behalf of the entire team, I’d like to thank Drew for his diligent work and greatly appreciate all his contributions throughout his tenure both at Caliva and The Parent Company,” mentioned Steve Allan, CEO of The Parent Company.

Conference Call

The Parent Company will host a convention name at the moment, May 17, 2021, to debate these outcomes. Steve Allan, Chief Executive Officer, Mike Batesole, Chief Financial Officer, and Dennis O’Malley, Chief Operating Officer and President of Caliva, will host the decision beginning at 5:00 p.m. Eastern time. A query and reply session will comply with administration’s ready remarks.

DATE:

Monday, May 17, 2021

TIME:

5:00 p.m. Eastern Time

WEBCAST:

Click Here

DIAL-IN NUMBER:

1 (877) 407-0789

CONFERENCE ID:

13719172

REPLAY:

 

 

1 (844) 512-2921 or 1 (412) 317-6671

Available till 12:00 midnight Eastern Time Monday June 14, 2021

Replay Code: 13719172

Financial outcomes and analyses can be found on the Company’s web site (ir.theparent.co) and SEDAR (www.sedar.com).

About The Parent Company:

The Parent Company (TPCO Holding Corp.) (NEO: GRAM.U, GRAM.WT.U) (OTCQX: GRAMF; OTC PINK: GRMWF) is California’s main vertically built-in hashish firm combining best-in-class operations with main voices in well-liked tradition and social impression. The Parent Company brings collectively international icon and entrepreneur Shawn “JAY-Z” Carter, leisure powerhouse ROC NATION, California’s main direct-to-consumer platform CALIVA, and main hashish and hemp producer, LEFT COAST VENTURES, to type a hashish trade chief for the post-prohibition period. Chief Visionary Officer Shawn “JAY-Z” Carter, one of the acknowledged and celebrated entrepreneurs of our time, guides The Parent Company’s model technique in partnership with Roc Nation, the world’s preeminent leisure firm with a roster of culture-making artists, athletes and influencers. The manufacturers we construct collectively will pave a brand new path ahead for a legacy rooted in fairness, entry, and justice.

For the most recent information, actions, and media protection, please go to www.theparent.co or join with us on LinkedIn and Twitter.

Forward Looking Statements

This press launch could comprise forward-looking data throughout the that means of relevant securities laws which displays The Parent Company’s present expectations relating to future occasions. The phrases “will”, “expects”, “intends” and comparable expressions are sometimes supposed to establish ahead trying data, though not all forward-looking data incorporates these figuring out phrases.

Specific forward-looking data contained on this press launch consists of, however will not be restricted to, statements regarding (i) The Parent Company’s future monetary efficiency(ii) capacity of The Parent Company to execute on its progress and consolidation technique; (iii) anticipated synergy advantages in 2021; (iv) expectations relating to future company growth actions; (v) and expectations relating to The Parent Company’s growth into new jurisdictions. Forward-looking data is predicated on quite a few assumptions and is topic to quite a few dangers and uncertainties, a lot of that are past The Parent Company’s management, which might trigger precise outcomes and occasions to vary materially from these which are disclosed in or implied by such ahead trying data. Such dangers and uncertainties embrace, however are usually not restricted to: modifications typically financial, enterprise and political situations, modifications in relevant legal guidelines, the U.S. and Canadian regulatory landscapes and enforcement associated to hashish, modifications in public opinion and notion of the hashish trade, reliance on the experience and judgment of senior administration, in addition to the elements mentioned below the heading “Risk Factors” in The Parent Company’s Annual Information Form dated March 25, 2021, which is obtainable on SEDAR at www.sedar.com. The Parent Company undertakes no obligation to replace such forward-looking data, whether or not on account of new data, future occasions or in any other case, besides as expressly required by relevant regulation.

Non-IFRS Financial Performance Measures (Unaudited)

Adjusted web earnings (loss), EBITDA and adjusted EBITDA are usually not acknowledged measures below IFRS and this information is probably not similar to information introduced by different corporations. For a reconciliation of EBITDA and adjusted EBITDA to essentially the most immediately comparable IFRS measure, see the part entitled “Reconciliation of Non-IFRS Measures” of the Q1 2021 MD&A.

Adjusted web earnings (loss) is calculated by adjusting web earnings (loss) as recorded within the unaudited condensed consolidated interim statements of earnings (loss) and complete earnings (loss) for the exclusion of sure different earnings and expense gadgets decided in accordance with IFRS. The Company believes that this usually accepted measure permits the analysis of the outcomes of constant operations and is beneficial in making comparisons between durations. Adjusted web earnings (loss) is meant to supply buyers with details about the Company’s persevering with earnings producing capabilities. Management makes use of this measure to observe and plan for the working efficiency of the Company along with different information ready in accordance with IFRS.

EBITDA is calculated by adjusting web earnings (loss) as recorded within the unaudited condensed consolidated statements of earnings (loss) and complete earnings (loss) for finance prices, present and deferred earnings tax, depreciation and amortization bills. The Company believes that this measure permits the analysis of the outcomes of constant operations and is beneficial in making comparisons between durations. EBITDA is meant to supply buyers with details about the Company’s persevering with earnings producing capabilities. Management makes use of this measure to observe and plan for the working efficiency of the Company along with different information ready in accordance with IFRS.

Adjusted EBITDA is calculated by adjusting web earnings (loss) as recorded within the unaudited consolidated monetary statements of earnings (loss) and complete earnings (loss) for the exclusion of sure different earnings and expense gadgets decided in accordance with IFRS, being the calculation for adjusted web earnings (loss) and then additional adjusting for finance prices, present and deferred earnings tax, change in truthful values, different non-recurring quantities, depreciation and amortization bills. The Company believes that this usually accepted measure permits the analysis of the outcomes of constant operations and is beneficial in making comparisons between durations. Adjusted EBITDA is meant to supply buyers with details about the Company’s persevering with earnings producing capabilities. Management makes use of this measure to observe and plan for the working efficiency of the Company along with different information ready in accordance with IFRS.

Caution Regarding Cannabis Operations within the United States

Investors ought to word that there are important authorized restrictions and laws that govern the hashish trade within the United States. Cannabis stays a Schedule I drug below the U.S. Controlled Substances Act, making it unlawful below federal regulation within the United States to, amongst different issues, domesticate, distribute or possess hashish within the United States. Financial transactions involving proceeds generated by, or supposed to advertise, cannabis-related enterprise actions within the United States could type the premise for prosecution below relevant U.S. federal cash laundering laws.

While the method to enforcement of such legal guidelines by the federal authorities within the United States has trended towards non-enforcement towards people and companies that adjust to medical or adult-use hashish applications in states the place such applications are authorized, strict compliance with state legal guidelines with respect to hashish will neither absolve The Parent Company of legal responsibility below U.S. federal regulation, nor will it present a protection to any federal continuing which can be introduced towards the Company. The enforcement of federal legal guidelines within the United States is a major threat to the enterprise of The Parent Company and any proceedings introduced towards the Company thereunder could adversely have an effect on the Company’s operations and monetary efficiency.

 

TPCO Holding Corp.

Interim condensed consolidated statements of economic place

 

(Unaudited, in United States {dollars})

As at

 

 

March 31,

2021

 

December 31, 2020

 

 

 

 

 

 

Assets

 

 

 

 

 

Current

Cash

 

$

281,025,634

$

Restricted money and money equivalents

 

 

5,306,405

 

582,622,025

Accounts receivables

 

 

4,591,133

 

Other receivables

 

 

 

24,977,765

Biological property

 

 

2,624,018

 

Inventory

 

 

31,606,078

 

Prepaid bills

 

 

7,152,991

 

Assets held on the market

 

 

18,774,542

 

Other present property

 

 

2,242,948

 

Total present asset

 

 

353,323,749

 

607,599,790

 

 

 

 

 

 

Investment in fairness shares

 

 

591,545

 

Security deposits

 

 

962,582

 

Prepaid bills and different property

 

 

2,652,062

 

81,333

Property and gear

 

 

11,794,694

 

Right-of-use property

 

 

52,353,734

 

Goodwill and intangibles

 

 

847,354,978

 

Total property

 

$

1,269,033,344

$

607,681,123

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

38,584,019

$

28,321,972

Consideration payable

 

 

3,369,507

 

Current portion of lease legal responsibility

 

 

3,277,486

 

Loans payable

 

 

3,358,686

 

Cash settled share-based funds

 

 

2,822,371

 

Contingent consideration

 

 

101,625,392

 

Liabilities held on the market

 

 

4,920,589

 

Class A Restricted Voting Shares topic to redemption

 

 

 

582,622,025

Total present liabilities

 

 

157,958,050

 

610,943,997

 

 

 

 

 

 

Other long-term liabilities

 

 

1,507,572

 

Lease liabilities

 

 

51,188,685

 

Deferred tax liabilities

 

 

97,464,014

 

Total liabilities

 

 

308,118,321

 

610,943,997

 

 

 

 

 

 

Shareholders’ fairness

 

 

 

 

 

Common shares

 

 

952,900,779

 

Warrant reserve

 

 

4,796,410

 

4,796,410

Class B shares

 

 

 

13,404,356

Shares to be issued

 

 

19,529,798

 

25,087,000

Contributed surplus

 

 

9,962,442

 

Deficit

 

 

(26,274,406)

 

(46,550,640)

Total shareholders’ fairness

 

 

960,915,023

 

(3,262,874)

Total liabilities and shareholders’ fairness

 

$

1,269,033,344

$

607,681,123

 

 

 

 

 

 

 

TPCO Holding Corp.

Interim condensed consolidated statements of earnings (loss) and complete earnings (loss)

(Unaudited, in United States {dollars})

 

 

 

 

Three-months ended

 

 

 

March 31, 2021

 

March 31, 2020

 

Sales

 

$

39,917,388

$

Cost of gross sales

 

35,238,987

Gross revenue earlier than truthful worth changes

 

4,678,401

 

 

 

 

 

 

Net impact of modifications in truthful worth of

 

organic property and stock

 

2,522,154

 

 

 

 

 

 

Gross revenue

 

7,200,555

 

 

 

 

 

 

Operating bills

 

61,859,064

311,573

 

 

 

 

 

 

Loss from operations

 

(54,658,509)

(311,573)

 

 

 

 

 

 

Other earnings (expense)

 

Interest earnings

 

 

6,908

 

1,949,342

Interest expense

 

(1,623,227)

(1,949,342)

Amortization of issuance prices on Class A warrants

 

 

 

(2,836,240)

Loss on remeasurement of property held on the market

 

 

(58,022,984)

 

Change in truthful worth of contingent consideration

 

 

131,093,854

 

Other expense

 

(117,157)

 

71,337,394

(2,836,240)

 

 

 

 

 

 

Income (loss) earlier than earnings taxes

 

16,678,885

(3,147,813)

 

 

 

 

 

 

Income tax profit

 

3,101,292

Net earnings (loss) and complete earnings (loss)

 

$

19,780,177

$

(3,147,813)

 

Earnings (loss) per share

 

 

 

 

 

Basic

 

$

0.23

$

(0.22)

Diluted

 

$

0.21

$

(0.22)

 

 

 

 

 

 

Weighted common variety of frequent shares

 

 

 

 

 

Basic

 

 

84,413,911

 

14,543,750

Diluted

 

 

85,697,978

 

14,543,750

 
 

TPCO Holding Corp.

Interim condensed consolidated statements of money flows

(Unaudited, in United States {dollars})

 

 

 

 

 

Three-months ended

 

 

 

 

March 31, 2021

 

March 31, 2020

 

 

 

 

 

 

 

Cash offered by (utilized in)

 

 

 

 

 

Operating actions

 

 

 

 

 

Net earnings (loss)

 

 

$

19,780,177

$

(3,147,813)

Adjustments for gadgets not involving money

 

 

 

 

 

Amortization of difficulty prices on Class A warrants

 

 

 

2,836,240

Loss on remeasurement of property held on the market

 

 

58,022,984

 

Interest expense

 

 

1,623,227

 

1,949,342

Provision for dangerous money owed

 

 

174,111

 

Depreciation and amortization

 

 

7,951,093

 

Shares issued for long-term strategic contracts

 

 

25,000,000

 

Share based mostly compensation expense

 

 

6,829,929

 

Non-cash gross sales and advertising expense

 

 

1,755,096

 

Fair worth change on organic property

 

 

(2,522,154)

 

Fair worth change of contingent consideration

 

 

(131,093,854)

 

Deferred earnings tax restoration

 

 

(3,312,619)

 

 

 

 

 

(15,792,010)

 

1,637,769

 

 

 

 

 

 

 

Net modifications in non-cash working capital gadgets

 

 

(40,111,018)

 

311,573

Total working

 

 

 

(55,903,028)

 

1,949,342

 

 

 

 

 

 

 

Financing actions

 

 

 

 

 

Proceeds from personal placement

 

 

51,635,000

 

Redemption of Class A restricted voting shares

 

 

(264,318,686)

 

Repayment of lease liabilities

 

 

(1,587,771)

 

Repayment of loans payable

 

 

(2,778,668)

 

Repayment of notes payable

 

 

(15,400,000)

 

Repayment of line of credit score

 

 

(10,836,105)

 

Total financing

 

 

 

(243,286,230)

 

 

 

 

 

 

 

 

Investing actions

 

 

 

 

 

 

Net money paid in enterprise mixtures

 

 

(1,874,925)

 

Cash held in Escrow

 

 

582,622,025

 

(1,949,342)

Purchases of property and gear

 

 

(532,208)

 

Total investing

 

 

 

580,214,892

 

(1,949,342)

 

 

 

 

 

 

 

Net change in money throughout the 12 months

 

 

281,025,634

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 

Beginning of 12 months

 

$

$

 

 

 

 

 

 

 

End of 12 months

 

$

281,025,634

$

 

 

 

 

 

 

 

 

 



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