GTEC Cannabis Co Reports First Quarter of Fiscal 2021 Results

Published: April 29, 2021

GTEC Cannabis Co Reports First Quarter of Fiscal 2021 Results

GTEC Holdings Ltd. d/b/a GTEC Cannabis Co., a multi-licensed producer of handcrafted, high quality cannabis products, is pleased to announce that it has reported its First Quarter financial results of fiscal 2021.

Key Financial Highlights of Q1 2021
(for the period ended February 28, 2021)
All figures are compared to the Company’s most recent fiscal quarter (Q4 2020)

  • Gross revenue of $2.2 million, compared to $2.5 million, a decrease of $313,000 or 12%, from the sale of 342 kilograms (“KG”) of cannabis, as the Company withheld inventory to fulfill certain obligations in the subsequent quarter for its Israeli export Agreement, and the launch of the BLNT by BLK MKT
  • Gross margin(A) dollars of $811,000 million (net of excise tax), compared to $686,000, an increase of $125,000 or 18%, while gross margin(A) percentage increased from 30% to 41%
  • Recreational cannabis sales accounted for 82% of total sales, compared to 87%
  • Overall weighted average selling price increased by 4% or $0.27 to $6.41
  • Recreational weighted average selling price decreased 9% to $7.48 per gram, as the Company initiated a national repricing strategy on certain products, to better align with its competitive set
  • Operating expenses(B) of $1.0 million, compared to $831,000, an increase of $179,000 or 22%, as the Company reallocated various expenses in Q4 2020, relating to 3PL
  • Net income from operations of $368,000 compared to $1.27 million, a decrease of $908,000 or 71%, due to non-cash fair value changes
  • Net income and comprehensive income of $815,000, compared to a $7.9 million loss
  • Adjusted EBITDA(C) loss of $199,000 compared to a loss of $263,000, a loss reduction of $64,000 or 24%.

“During the first quarter of fiscal 2021, our team focused on building a solid foundation in order to deliver incremental growth for the remainder of the fiscal year.” said Norton Singhavon, Founder and CEO at GTEC. “These efforts have resulted in Q2 revenues already exceeding Q1.  In addition to improvement on revenues, we recently strengthened our balance sheet substantially and are now completely debt-free. We look forward to continuing to execute our strategy of bringing top tier products to consumers.”

Key Corporate Highlights of Q1 2021

  • Fully repaid its $2 million Convertible Promissory Note with Invictus MD Strategies Corp.
  • Divested of its last remaining retail asset for total cash proceeds of $500,000, which was paid upon closing.
  • Tumbleweed Farms Corp. (“TWF”) executed an agreement with Habitat Craft Cannabis Ltd. (“Habitat”) under which TWF will provide co-pack and sales services to Habitat.
  • 3PL Ventures Inc. (“3PL”) completed construction of its purpose-built indoor cultivation facility and subsequently submitted an evidence package to Health Canada on February 19, 2021. The 3PL facility is a purpose-built indoor cultivation facility located in Vernon, B.C., and is approximately 60,000 sq. ft.

Key Sales and Market Highlights of Q1 2021

  • BLK MKTTM Cherry Punch was the #1 selling premium product in Ontario for the month of December(D).
  • Increased SKU listings in British Columbia (to 22 products) and Ontario (to 16 products).
  • Launched pre-rolls under the BLK MKT™ and Tenzo™ brands on December 16, 2020, selling out in the first day.
  • Launched exclusive cultivars; Alien Sin Mint Cookies and Peanut Butter MAC, with an overwhelmingly positive response resulting in substantial re-orders to supply growth.
  • Launched the first blunt in the legal Canadian cannabis market, under the BLK MKT TM brand and BLNT sub-brand, with an exclusive cultivar, Candy Rain.
  • Launched its GreenTec Medical Cannabis E-Commerce Website and subsequently commenced acquiring medical cannabis patients and fulfilling orders. The Company has experienced a steady increase in medical clients since that time, and is optimistic about the potential to drive significant sales and earnings through its medical channel.
  • Secured substantial orders of PRISTINE TM seeds for the upcoming growing season in Ontario, surpassing last year’s total sales.

Key Subsequent Events of Q1 2021

  • Q2 revenues (including Purchase Orders for May delivery) have already exceeded Q1 revenues, with the expectation to restore the Company’s growth trajectory.
  • Closed a bought deal public offering (the “Offering”) of units for gross proceeds of $23,000,000, issuing 28,750,000 units at a price of $0.80 per unit. The Offering was co-led by Desjardins Capital Markets and Eight Capital as co-lead underwriters and joint book runners.
  • Repaid its two Senior Secured Promissory Notes (the “Notes”) with NFS Leasing Canada Ltd. in full. The Notes, which carried an aggregate principal balance of $6 million, were fully repaid on April 9, 2021. As a result, the Company is now free of all debt liabilities, with all security interests removed and the Company’s assets fully unencumbered.
  • Subsequent to the repayment of the NFS Notes, the Company maintains a strong working capital position and balance sheet, with a current cash balance of approximately $19 million.
  • Executed an agreement with Focus Medical Herbs Ltd., an Israeli medical cannabis company. Under the terms of this agreement, the Company’s initial shipments of cannabis will be produced by Grey Bruce, with the expectation to export 500 to 1,000 KG per year.

See the full report here: https://www.newswire.ca/news-releases/gtec-cannabis-co-reports-first-quarter-of-fiscal-2021-results-894379797.html

Recent News

View All News Items

Latest Article

How Database Integrations Can Improve Every Step in Your Cannabis Supply Chain Labeling

How Database Integrations Can Improve Every Step in Your Cannabis Supply Chain Labeling

At any step in the cannabis supply chain, your labeling system should allow for full control and traceability, from seed to sale. Implementing lean principles and labeling best practices across the cannabis supply chain can help you streamline your seed-to-sale labeling process and help you gain control.

Click below to read the full blog and learn how to reduce waste, cut costs, and gain efficiency with cannabis labeling: https://bit.ly/2KwZ5IQ

Read Article