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TORONTO, March 02, 2020 (GLOBE NEWSWIRE) -- MPX International Corporation (“MPX International”, “MPXI” or the “Company”) (CSE:MPXI; OTCQX:MPXOF) today reports financial results for its first quarter, the three month period ended December 31, 2019. All figures are presented in Canadian dollars unless otherwise indicated.
“These milestones are more than a list of accomplishments; they are the actualization of our global strategy to become a premier global cannabis producer. They are also a reflection of the momentum we continue to experience as we further advance each distinct part of our operations to create a successful vertically integrated entity,” said W. Scott Boyes, Chairman, President and Chief Executive Officer of MPXI. “From our domestic operations in Canada, to our other operations spanning the globe, we are executing on the initiatives that will drive our sustainable long-term success.”
“MPXI Labs in Nyon, Switzerland provides us with our greatest source of near-term revenue growth, with nearly 90,000 kgs of sun-grown certified organic cannabis harvested in the fall of 2019 and ready for processing,” said Mr. Boyes.
“In Canada, we are also seeing our revenue start to grow, another indicator of how our plans are coming together. While it has only been mere months since we have been able to sell directly into the Canadian market, our increasing sales combined with our ability to leverage the Medical Cannabis Learning Network, and Spartan Wellness, affirms our expectations that these revenue streams in Canada will continue to generate sustainable increases going forward.” Mr. Boyes said.
“Apart from Europe and Canada, we continue to gain traction in our other global operations. That we were able to complete the definitive agreements for our Joint Venture in South Africa firmly establishes our low-cost high-quality production centre for biomass. This biomass will fuel our operations in Malta, our production hub for Salus BioPharma products that will ultimately make their way into the rest of Europe.”
“We have laid the groundwork, navigating multiple regulatory jurisdictions to create unique first mover opportunities,” concluded Mr. Boyes. “We are seeing the fruition of these results start to percolate in our first quarter results and are excited to continue on the journey as we work to further grow MPXI.”
The key financial measures indicated below were used by management in evaluating and assessing the performance of MPXI’s business for the fiscal first quarter of 2020. A more detailed discussion of these and other metrics, as well as operational events, can be found in the Company’s Financial Statements and Management Discussion & Analysis (“MD&A”) filed on www.sedar.com.
For the three months ending December 31, 2019, MPXI reported net revenue of $616,309 (three months ending December 31, 2018: $256,572). Revenue was mainly driven by sales in Spartan and Holyweed.
Gross profit before adjustment for the unrealized gain in the fair value of biological assets for the three months ending December 31, 2019 was $551,605 which represents a gross margin of 88.2%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $1,416,848 which represents a gross margin of 226.5%. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda facility and in Switzerland.
Gross profit before adjustment for the unrealized gain in the fair value of biological assets for the three months ending December 31, 2018 was $239,321 which represents a gross margin of 93.3%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $525,065 which represents a gross margin of 204.6%. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda facility.
General and administrative expenses were $3,863,381 for the three months ended December 31, 2019 as compared to $815,074 for the three months ended December 31, 2018.
Overall, the increase in general and administrative costs for the three months ended December 31, 2019, was primarily due to increases in salaries and benefits, office and general, consulting fees relating to the integration of Canveda, Spartan, and Holyweed as well as costs associated with the Company’s continued growth.
Professional fees increased to $845,051 for the three months ended December 31, 2019 as compared to $317,530 for the three months ended December 31, 2018. This increase in professional fees is due to the change in volume and complexity of accounting and legal services required by the Company driven by acquisitions and growth. These fees include expenses related to audit, advisory, legal work, government and investor relations, consulting and costs associated with the board of directors.
As part of the Company’s incentive stock option plan, the Company recognized $40,172 of share-based compensation for the three months ended December 31, 2019 as compared to $195,682 for the three months ended December 31, 2018. The Company granted stock options to employees, consultants, directors and officers of the Company under the Company’s stock option plan on February 26, 2019, May 29, 2019, September 19, 2019 and February 11, 2020.
Amortization and depreciation expenses increased to $1,453,547 for the three months ended December 31, 2019 as compared to $91,741 for the three months ended December 31, 2018. The increase in amortization and depreciation relates primarily to the intangible and capital assets associated with the Canveda facility along with impact of IFRS 16 regarding treatment of leases.
Other income and expenses
Other income was $85,707 for the three months ended December 31, 2019 as compared to other expenses of $583,883 for the three months ended December 31, 2018.
Net Loss After Tax
Net loss after tax was $4,456,065 for the three months ended December 31, 2019 as compared to a loss of $1,478,845 for the three months ended December 31, 2018.
Adjusted EBITDA was a loss of $4,513,936 for the three months ended December 31, 2019 as compared to a loss of $949,794 for the three months ended December 31, 2018.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the global cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2019 and 2018 and the corresponding annual management’s discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
For further information, please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President and CEO