Plus Products Reports First Quarter 2021 Financial Results, Announces Transition of Chief Financial Officer

SAN MATEO, Calif., May 28, 2021 (GLOBE NEWSWIRE) -- Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) (the “Company” or “PLUS”), a cannabis branded products company in the U.S., today released its unaudited financial and operational results for the three months ended March 31, 2021, expressed in U.S. dollars. These filings are available for review on the Company’s SEDAR profile at and on the Canadian Securities Exchange (the “CSE”) website at

The Company also announced today that Nathan Pearson, Chief Financial Officer, will be leaving the Company at the end of this month. The Company is pleased to announce that Tessa O’Dowd, who has served as the Company’s Controller for the last three years, has been appointed as the Company’s Chief Financial Officer.  

“Mr. Pearson has played a crucial role in our organization over the last two years, spearheading the effort that saw the Company reduce its cash consumption by 85% from 2019 to 2020,” stated Jake Heimark, Co-founder and CEO. “We are grateful for Mr. Pearson’s service and contributions to the company. We are excited to have Ms. O’Dowd step into the role of CFO moving forward. Ms. O’Dowd has been with the Company since before the IPO and I trust her immensely with the responsibility of her new position.”

Q1 2021 Financial Highlights

  • Revenues:  Net revenues were $2.5M in Q1 2021. As detailed in the release of the Company’s 2020 Audited Financials, net revenues during the first quarter were negatively impacted by a significant one-time accounting shift in which PLUS has moved to recognizing revenue at the time its products are sold to licensed retailers for all sales occurring through the Company’s new self-service distributor. Previously, the Company recognized revenue at the point in which inventory was transferred (sold) to its full-service distribution partners. The shift resulted in an effective delay in the time at which all sales of products through the Company’s new distributor are recognized relative to sales that occurred to its previous distribution partners.
  • Gross Profits: Gross profits were $1.0M in Q1 2021. Gross profit margin in Q1 2021 grew to 41%, representing an increase year-over-year as compared to 35% in Q1 2020, and an increase quarter-over-quarter as compared to 30% in Q4 2020.
  • Operating Profits (Losses): Operating losses were $(2.4)M in Q1 2021, representing a 15% increase year-over-year from $(2.1)M in Q1 2020, but a 29% improvement quarter-over-quarter from $(3.4)M in Q4 2020.
  • Cash Balance: The Company reported $8.9M in cash and cash equivalents at March 31, 2021. As a result of the transition to its new self-service distribution partner, the Company invested an additional $1.5M into short-term working capital and other one-time cash outflows.

Q1 2021 Business Highlights

  • In January 2021, the Company entered into an exclusive sales agreement with Elements of Green, a European e-commerce marketplace for hemp CBD products, to offer its products across the United Kingdom.
  • Also in January 2021, the Company’s Sour Watermelon UPLIFT gummies were recognized as LeafLink's best-selling cannabis edible in the California market and one of the five best-selling edible products across all active markets.¹
  • In February 2021, the Company announced that it entered into a partnership with CannRx Biosciences, a leading Israeli cannabis firm in the boutique field of cannabis-based botanical medicine, to enhance the onset of the Company’s products.
  • Also in February 2021, the Company announced a strategic shift to expand its sales team, internalize all account management, and transition to a self-service distribution partner in the California adult-use market.
  • Also in February 2021, the Company announced that holders of the Company’s 8.00% unsecured convertible debentures due February 28, 2021 approved certain proposed amendments to the terms of the Debentures, including the extension of the maturity date from February 28, 2021, to February 28, 2024, and an increase in the coupon rate of from 8.00% to 12.00% per annum. Further details of the amendments to the debentures can be found in the Company’s press release dated February 25, 2021, available here.
  • In March, 2021, the Company announced that Jennifer Tung would be leaving her roles as Chief Risk Officer and General Counsel, effective April 15, 2021. Ms. Tung remains a special advisor to the Board of Directors.
  • Also in March, 2021, the Company announced a partnership with Eaze Technologies, one of California’s largest delivery marketplaces for legal cannabis, to launch a co-branded, limited-edition cannabis gummy.

Post-Period End Business Highlights

  • In April, the Company announced the completion of the previously announced conversion of certain 12.00% secured debentures due February 28, 2024. Debentures in the aggregate principal amount of CAD$4,990,000 (4,990 Debentures) were converted into 5,252,631 Subordinate Voting Shares issued from treasury at a conversion price of CAD$0.95 per share. In addition, accrued interest up to the conversion date in the aggregate amount of CAD$118,096.66 was paid to the former holders of the Debentures subject to conversion.
  • Also in April, the Company announced the launch of its PLUS Hash Gummies in concert with Biscotti Brands, a premium hash brand. The product is available for purchase in California for a limited time.
  • Also in April, the Company announced that its amended debentures were approved for listing on the CSE under the symbol “PLUS.DB.A”.

Management Commentary

“At PLUS, 2020 was centered around reducing our cash consumption and shifting from a single brand to a portfolio of brands. We believe that we were successful in achieving each of these objectives and that PLUS is well positioned to pursue its goals in 2021 and beyond. These include further cementing the Company’s status as a leading cannabis brand in its home market of California², which remains the largest cannabis market globally³, along with exploring potential new geographies into which the Company can expand.

“In February of this year, the Company announced an important transition to a leading self-service distributor, Nabis Distribution. Historically, the Company has partnered exclusively with full-service distributors, relying on a hybrid of both internal and external personnel to make up its sales force. Under this new self-service model, the sales cycle for every order will be owned from start to finish by a member of the PLUS team.

“To further facilitate the shift towards a self-service distribution model, we have invested in our internal sales force by expanding the team more than 75% since the start of Q4 2020. Despite the success we had in building the PLUS brand with our full-service partners, we have found the most effective way for us to achieve the broadest distribution of our products is to have a member of the PLUS team representing the Company at each and every interaction with our retail customers. This transition will make that a reality across the entire California market.

“With this strategic shift in our sales model complete, we believe PLUS is poised to further capitalize on the consumer brand foundation we have built in the California cannabis market. According to a Brightfield Brand Health Survey conducted in December 2020, 63% of our consumers say that PLUS is their favorite gummy brand; 42% of PLUS consumers have been using our products for over 1 year, compared to the next highest brand at 33%; 67% of PLUS consumers use the brand at least weekly; and 88% of PLUS consumers plan to buy our products again.

“Critically, in the first quarter, PLUS was successful in extending its debt obligations with holders of the Company’s Debentures. Originally due February 28th, 2021, debentureholders approved all proposed amendments, including an extension of the term until February 28th, 2024. Management believes that this 3-year extension, representing 150% of the original term, demonstrates long-term confidence from our investors and gives the Company the opportunity to create value for our shareholders as we continue to move forward.”

  2. According to Headset Insights PLUS is one of the three largest edibles brands in California since adult-use cannabis legalization
  3. Arcview | BDS Analytics - State of the Legal Markets 7th Edition

Conference Call Details

At 5:00 pm Eastern Time / 2:00 pm Pacific Time today (Friday, May 28, 2021) the Company will host a conference call and webcast to discuss the financial results and its recent corporate highlights.

Participant Dial-In Numbers:

Toll-Free: (866) 220-4156

Toll / International: (864) 663-5231

*Participants should request the Plus Products Earnings Call or provide conference ID: 2654934

Please dial-in or log-on to the webcast at least 10 minutes before the start of the call

The call will also be webcast at Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. Following the conclusion of the call, there will be an archived audio webcast of the conference call available for replay on the Company’s website at

Jake Heimark, Co-founder and Chief Executive Officer, and Tessa O’Dowd, Chief Financial Officer, will be conducting a question and answer session following the prepared remarks.

About PLUS

PLUS is a cannabis and hemp food company focused on using nature to bring balance to consumers’ lives. PLUS’s mission is to make cannabis safe and approachable – that begins with high-quality products that deliver consistent consumer experiences. PLUS is headquartered in San Mateo, CA.

For further information contact:

Jake Heimark
CEO & Co-founder


Cole Stewart
Investor Relations
Tel +1 778.231.6324

Mattio Communications

The CSE does not accept responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements:

This press release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (each, a “forward-looking statement”). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur and include, but are not limited to, statements relating to: the impact of the Company’s initiatives to reduce its cash consumption and to shift from a single brand to a portfolio of brands on the Company’s goals in 2021 to further cement the Company’s status as a leading cannabis brand in California and the exploration of potential new geographies for expansion; the impact of the Company’s adoption of the new self-service distribution model on the Company’s sales cycle; the extent to which the investment by the Company on its internal sales force will further facilitate the shift towards a self-service distribution model and to help the Company achieve the broadest distribution of its products; the extent to which the strategic shift in the Company’s sales model will help the Company further capitalize on the consumer brand foundation the Company has built in the California cannabis market; the extent to which the results from the Brightfield Brand Health Survey conducted in December 2020 reflect that the Company continues to be one of the few names in the cannabis space that has built true brand consumer trust and loyalty; and the extent to which the approval of the extension by the Company of its debt obligations demonstrates long-term investor confidence and the extent to which this contributes to the Company’s opportunity to create value for our shareholders. These forward-looking statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this press release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, the success of the Company’s investments, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of the Company’s products, customer experience and retention, the continued development of adult-use sales channels, managements estimation of consumer demand in in jurisdictions where the Company exports, expectations of future results and expenses, the availability of additional capital to complete capital projects and facilities improvements, the ability to expand and maintain distribution capabilities, the impact of competition, the ability of the Company to implement initiatives and the possibility for changes in laws, rules, and regulations in the industry.

Further, the duration and severity of the current COVID-19 pandemic may significantly impact or exacerbate some of the above-listed risks and uncertainties.  Risks that may be further impacted by the COVID-19 pandemic relate to the Company’s operations and expansion, including the Company’s ability to grow its brand and sales and to maintain production levels in the event that the Company’s employees are restricted from accessing facilities for a significant period of time; to the Company’s ability to access capital and the level of borrowing costs; the Company’s ability service obligations under its debt securities and other debt or lease obligations; and the Company’s ability to comply with the covenants contained in the agreements that govern the Company’s existing indebtedness.

The transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings, travel restrictions, significant disruptions to business operations, supply chains and customer activity and demand (across all sectors), service cancellations, reductions and other changes, and quarantines, as well as considerable general concern and uncertainty.

The overall severity and duration of COVID-19-related adverse impacts on the Company’s business will depend on future developments which cannot currently be predicted, including directives of government and public health authorities, the speed at which suppliers and distributors can return to full production, the status of labor availability and the ability to staff the Company’s operations and facilities. Even after the COVID-19 outbreak has subsided, the Company may continue to experience material adverse impacts to the businesses as a result of its global economic impact, including any related recession.

The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Non-GAAP Measures:

Adjusted uncompressed weighted average shares outstanding and loss per share.

The Company has additionally determined the adjusted uncompressed weighted average shares outstanding and loss per share, basic and diluted. The Company believes these measures to be representative of loss and comprehensive loss on a per share basis; however, these performance measures have no standardized meaning. As such, there are likely to be differences in the method of computation when compared to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with GAAP, some investors use this information to evaluate the Company’s performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Condensed Interim Consolidated Statements of Financial Position
(Expressed in U.S. Dollars - Unaudited)

  As at March 31, As at December 31, 
 Note2021 2020 
  $ $ 
Cash and cash equivalents              8,897,534  11,578,213 
Trade receivables              1,962,273  1,932,986 
Prepaids and deposits5                706,516  290,076 
Taxes recoverable                 108,098  108,098 
Note receivable6                  37,636  145,520 
Inventory7             3,115,654  2,225,331 
             14,827,711  16,280,224 
Prepaids and deposits5                889,815  867,495 
Property and equipment8             2,068,650  2,188,784 
Intangible assets9                  25,885  40,441 
Deferred tax asset              2,130,690  2,109,704 
Total assets            19,942,751  21,486,648 
Accounts payable and accrued liabilities10             1,640,500 1,304,848 
Current portion of vehicle loans                   29,006  28,751 
Current portion of lease liabilities11                251,830  242,125 
Current portion of convertible debentures12                           -  19,331,949 
               1,921,336  20,907,673 
Vehicle loans                 101,302  108,688 
Lease liabilities11                353,761  420,305 
Convertible debentures12           13,587,657  - 
Total liabilities            15,964,056  21,436,666 
Shareholders' equity   
Share capital13           45,973,522  41,962,392 
Reserves13           12,445,868  9,362,064 
Deficit          (53,502,379)(50,594,383)
Accumulated other comprehensive loss               (938,316)(680,091)
Total shareholders' equity              3,978,695  49,982 
Total liabilities and shareholders' equity            19,942,751 21,486,648 

Nature of operations and going concern (Note 1)
Commitments (Note 19)
Events after the reporting period (Note 20)

Approved on behalf of the Board of Directors on May 27, 2021:

"Craig Heimark" "Jacob Heimark"
Director Director

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Expressed in U.S. Dollars, except number of shares - Unaudited)

  Three Months Ended March 31, 
 Note2021 2020 
  $ $ 
Revenue              2,543,682  4,739,209 
Cost of sales              1,496,562  3,085,419 
Gross margin              1,047,120  1,653,790 
Operating expenses   
Advertising and promotion                 346,432  386,675 
Depreciation and amortization8, 9                  24,502  25,319 
Consulting fees                 222,855  171,841 
General and administrative                 311,681  460,719 
Meals and travel expenses                   31,325  131,944 
Professional fees                 427,562  381,987 
Regulatory fees                     1,797  15,552 
Research and development                     3,902  7,473 
Salaries and benefits14             1,469,777  1,743,710 
Share-based compensation13(f)(h)                581,468  394,547 
Loss from operations            (2,374,181)(2,065,977)
Other (income) expense   
Interest and other income                 (86,984)1,490 
Accretion finance income4                (25,289)(43,807)
Accretion expense12                352,499  430,907 
Interest expense                 316,934  423,057 
Foreign exchange loss (gain)                   (3,318)36,780 
Loss before income taxes            (2,928,023)(2,914,404)
Income tax (recovery) expense                 (20,027)16,990 
Net loss for the period            (2,907,996)(2,931,394)
Currency translation adjustment                 258,225  (1,480,125)
Loss and comprehensive loss for the period            (3,166,221)(1,451,269)
Weighted average common shares outstanding:  
Basic and diluted 49,149,524 33,822,501 
Loss per share:  
Basic and diluted                     (0.06)(0.09)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.